9 April 2021
Author: Riatu Mariatul Qibthiyyah
Abstract
In the year 2020, in response to the COVID-19 health crisis, there were a series of adjustments adopted by provinces and local governments. From their stated revised budget, most of provincial and local governments responded by shifting spending allocation to COVID-19 related activities mitigation, rather than by expanding expenditures. Lower-level government expenditures growth in 2020 was -10.11% and -12.11% for provinces and local governments respectively. Expenditure contraction occurred in all provinces and only 12.4% of local governments showed a positive growth in their public expenditures. On the type of expenditures adjustment, a high increase of emergency spending which covered 3.3% of total provincial 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 the Java-Bali region, the preliminary results show that emergency spending seemed effective in reducing COVID-19 fatalities for the case of provinces in the Java-Bali region.
