Local government performance during the COVID-19 outbreak

Abstract

The purpose of this paper is to explore the impact of capital expenditure, special allocation fund, local government revenue, government size, intergovernmental revenue, wealth, leverage, local expenditure, and balancing fund to the performance of local government under the COVID-19 outbreak. The methodology in this study uses different tests and multiple regression. The investigation is based upon a data set of 542 local governments in Indonesia. The author combined the analysis before and during COVID-19. Performance is measured by the level of independence, effectiveness, and efficiency. The results of the study show that there is no difference in the performance of local governments measured by the level of effectiveness and efficiency, but for the level of independence there are differences between before and during COVID-19. The results of the influence test for each variable, both simultaneous and partial, show that local government revenue, special allocation funds, intergovernmental revenue, total revenue, total expenditure, and capital expenditure, simultaneously have an effect both before and during the occurrence of COVID-19 on the performance of local governments. Partially they show special allocation funds affected the level of independence of local governments. Intergovernmental revenue both before and during the pandemic has no effect on performance. Capital expenditure and total expenditure both before and during the pandemic affect the financial performance of local governments as seen from the level of efficiency.