The response of local governments in financing related to the COVID-19 pandemic: A literature review

Not only the Central Government, local governments also have a role to shape, adapt and provide a holistic response to the COVID-19 pandemic. One of the most important actions taken by local governments during the COVID-19 pandemic is to make immediate, timely, and targeted decisions for the right institutions in order to give an effective response. Regarding financing, the main point is to focus on increasing support and accelerating fiscal transfer funds to local governments in an effort handle COVID-19. This paper wants to observe the empirical practice of local governments in various countries in responding to the COVID-19 pandemic, especially in terms of financing various programs and activities related to the COVID-19 response. Literature was obtained from several databases, namely PubMed, ScienceDirect, Cochrane Library and Google Scholar. Of the 783 articles obtained at the start of the search, in the end only 11 articles met the inclusion and exclusion criteria of this study. The impact of the COVID-19 pandemic is aparrent in all parts of the world, including in countries’ local governments, that forced them to carry out various efforts of mitigating the severity of the pandemic. Although the detailes of local governments budgeting were not found in most of the articles studied in this literature review, it is sufficient to provide a fairly significant picture of the function of local government in tackling the spread of COVID-19.

ANALISA KEBIJAKAN ANGGARAN DALAM PENGENDALIAN PENCEMARAN LINGKUNGAN AKIBAT OPERASIONAL PERTAMBANGAN EMAS SKALA KECIL (PESK) DI KABUPATEN XYZ

Pertambangan Emas Skala Kecil (PESK) sebagai penopang utama perekonomian masyarakat, namun penggunaan merkuri pada proses amalgamasi emas berimplikasi pada kerusakan lingkungan. Penelitian ini bertujuan untuk mengetahui kebijakan penganggaran dalam pengendalian pencemaran lingkungan hidup akibat operasional PESK serta memetakan tantangan dan peluang untuk memberikan rekomendasi untuk perbaikan kedepannya. Pemerintah dari berbagai level telah melakukan penguatan kerangka hukum dengan menerbitkan beberapa regulasi untuk mengatasi permasalahan pencemaran akibat merkuri. Dalam kurun waktu 5 tahun (2015 – 2019) Pemerintah Kabupaten XYZ mengalokasikan anggaran sebesar Rp. 781.410.000,- untuk pengendalian pencemaran lingkungan hidup akibat operasional PESK. Penelitian ini merekomendasikan untuk menggunakan mekanisme ecological fiscal transfer dari APBN dan bekerjasama dengan lembaga internasional dalam menyelesaikan solusi pencemaran akibat merkuri

Do Fiscal Transfers Foster Regional Economic Growth?

Fiscal transfer development across the world today has been in part driven by assertions of a supposed ‘economic dividend’ linked with the devolved financial spending. There is, however, little empirical evidence to validate these assertions in Kenya. It is against this background that this study was carried out to estimate the end product of fiscal transfer on regional economic growth in Kenya using a secondary panel data set. Using the ARDL estimation technique the long -run and error correction estimates of the model were generated. The findings revealed that increased fiscal transfer in recurrent budgets accelerates regional growth, hence confirming the Keynesian hypothesis. Conversely, fiscal transfer in capital expenditure was insignificant. This study recommends the need for policymakers to put in place policies and strategies that will improve budget allocation and execution in capital budgets so as to improve physical infrastructure and thus boost private productivity and consequently regional income growth.

Impact of Fiscal Decentralisation on Economic Growth and Poverty Reduction in Aceh Province, Indonesia

This study analyses the impact of fiscal decentralisation policy on economic development and poverty reduction. It focuses on the practice of intergovernmental fiscal transfer and on special autonomy policy in Aceh province, Indonesia, using data from 23 districts gathered from 2008 to 2018. Undertaking a panel data analysis, it will analyse the impact of intergovernmental fiscal transfer from central to local government on local government expenditure. The impact of local government expenditures and fiscal decentralisation practices on local gross domestic product (GDP) and poverty is also measured. The results show that several intergovernmental fiscal transfer policies in Aceh positively enhance the local expenditure. Further, the local government spending and fiscal decentralisation practices in Aceh improve the local GDP and reduce poverty levels in the region.

Does Fiscal Transfer Improve the Equalization of Regional Public Health Service Evidence from a Spatial Panel-Data Analysis in China

Public health service is regarded a key social resource contributing to the national health and sustainable development. Its development gap, however, exists among regions in China due to the unbalanced regional economy, and is also affected by financial distribution. With the effect of tax reform, central fiscal transfer has become a strategic approach to narrow the regional gap of public health service and improve the regional development. This paper aims to evaluate provincial public health service levels in China by applying entropy method and shows that obvious spatial imbalance of public health service level exists in Chinese provinces and such imbalance is also consistent with that of average fiscal transfer from the central government to the regional ones. The current research also looks at, by adopting spatial panel model, a model developed from economic convergence model, whether central fiscal transfer effectively helps to lower the level of public health service difference in regions and the outcome depicts that central fiscal transfer, particularly fiscal transfer for specific purposes, accelerates Chinese public health service development especially in eastern, middle and western regions. From the perspective of spatial effect, neighborhood imitation effect exists to allow completion among neighboring regional governments and therefore more investment to public health service. Compared with the pace of economic development, central fiscal transfer’s limited effect is still seen in less developed regions particularly some midland and western areas, due to the inadequate investment rooted in government’s structured expenditure plan. The implication of this research is that, apart from the attention to economic growth, the government should, with the effort of fiscal transfer, financially focus more on the area of public health service.

Will Ending the One-Child Policy and Raising the Retirement Age Enhance the Sustainability of China’s Basic Pension System?

The sustainability of China’s Basic Pension System (CBPS) has been challenged by the ageing of the population and the decline in economic growth. This article establishes a Markov model for CBPS to examine whether the reforms, including ending the one-child policy and raising retirement the age, will shrink the negative income–expenditure gap. We find that the negative income–expenditure gap will destroy CBPS in the future in the absence of fiscal transfer or reform. Ending the one-child policy will increase the number of contributors and then reduce the gap in the short term but will worsen the gap in the long term. Raising the retirement age will have several positive effects overall while increasing expenditures in certain periods. The contributions of this article are describing CBPS in detail and establishing a precise model to analyze the effectiveness of reforms.