WHEN LOCAL WISDOM BECOMES SOCIAL CONTROL: INSIGHTS ON FRAUD PREVENTION FROM TRADITIONAL VILLAGES IN BALI

Abstract

This study examines how governance actors in Balinese desa adat (traditional villages) interpret and 
experience local wisdom as a form of social control in relation to fraud prevention. Using a qualitative 
phenomenological-hermeneutic approach, the study explores how culturally embedded values are internalized and understood in shaping ethical conduct, accountability, and community trust. Fieldwork was conducted in three desa adat located in Denpasar City, Badung Regency, and Karangasem Regency, involving eight informants representing customary leadership, village administration, community and spiritual leadership, traditional security, civil society, and cultural expertise. Data were collected through in-depth interviews, participant observation, and document analysis. The findings indicate that participants interpreted iseng (shame), menyama braya (social solidarity and collective responsibility), and karma phala (moral consequences) as culturally embedded moral reference points that shape their understanding of appropriate conduct. Awig-awig (customary law), pararem, community deliberation, and horizontal social monitoring were similarly perceived as important sources of informal accountability. Through the lens of Ethical Climate Theory, these practices reflect interacting caring, rules, independence, and law-and-code orientations, while instrumental orientations represent potential tensions when individual or group interests override shared ethical expectations. Participants also described challenges in reconciling customary accountability practices with formal state requirements. This study contributes to fraud and governance literature by integrating local wisdom, Ethical Climate Theory, and fraud frameworks to show how fraud related conditions acquire culturally situated social, moral, and spiritual meanings within traditional village governance.