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Province and Local Finances in Indonesia during COVID-19 Pandemic

Author

Listed:
  • Riatu Mariatul Qibthiyyah

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

Abstract

In the year 2020, in response to COVID-19 health crisis, there were series of adjustment adopted by provinces and local governments. From their stated revised budget, most of provinces and local governments responded by shifting spending allocation to COVID-19 related activities mitigation, rather than by expanding expenditures. Lower-level government average expenditures growth in 2020 is -10.11% and -12.11% respectively for provinces and local governments. Expenditure contraction occurred in all provinces and only 12.4% of local governments show of a positive growth in its public expenditures. On the type of expenditures adjustment, a high increase of emergency spending which covered of 3.3% of total provinces and local government expenditures, may also translate to higher health expenditures. Based on aggregate provincial level data and given that COVID-19 fatalities were concentrated in Java-Bali region, the preliminary results show that emergency spending seem effective in reducing COVID-19 fatalities for the case of provinces in Java-Bali region.

Suggested Citation

  • Riatu Mariatul Qibthiyyah, 2021. "Province and Local Finances in Indonesia during COVID-19 Pandemic," LPEM FEBUI Working Papers 202159, LPEM, Faculty of Economics and Business, University of Indonesia, revised 2021.
    • Handle: RePEc:lpe:wpaper:202159
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    File URL: https://www.lpem.org/repec/lpe/papers/WP202159.pdf
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    References listed on IDEAS

    as
    1. World Bank, 2020. "Indonesia Public Expenditure Review 2020," World Bank Publications - Reports 33954, The World Bank Group.
    2. Susan Olivia & John Gibson & Rus’an Nasrudin, 2020. "Indonesia in the Time of Covid-19," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 56(2), pages 143-174, May.
    3. World Bank, 2020. "The COVID-19 Pandemic [Pandémie De Covid-19]," World Bank Publications - Reports 33696, The World Bank Group.
    4. World Bank, 2020. "Spending Better to Reduce Stunting in Indonesia," World Bank Publications - Reports 34196, The World Bank Group.
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    Cited by:

    1. Aisyah Nurrul Jannah & Khoirunurrofik, 2022. "The Impact of COVID-19 Pandemic on Local Fiscal Revenue: Empirical Evidence from the Regions with Dominant Tertiary Sectors," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 68, pages 87-101, Desember.

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    More about this item

    Keywords

    state and local finance — government expenditure — pandemic COVID-19 — emergency spending;

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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