LOCAL GOVERNMENT FINANCIAL SUSTAINABILITY BEFORE, DURING, AND AFTER THECOVID-19 PANDEMIC

Abstract

This study to analyze how the COVID-19 pandemic affected the fiscal sustainability of Indonesian provincial governments by comparing conditions before, during, and after the crisis. Using a quantitative approach, the analysis draws on secondary data from regional budget (APBD) reports covering 34 provinces from 2018–2024. Fiscal sustainability is assessed through two revenue-based indicators namely regional revenue effectiveness and fiscal independence. Normality tests guided the choice of methods, with ANOVA applied to normally distributed data and the Kruskal–Wallis test used when distributions were non-normal. Results show a significant decline in regional revenue effectiveness after the pandemic compared with both the pre- and mid-pandemic periods, while fiscal independence also varied across the three phases. Post-hoc analysis indicates that the most pronounced differences occurred between the post-pandemic period and the earlier phases, highlighting the long-term fiscal pressure created by the pandemic and the slow pace of revenue recovery. These findings underscore the need for strategies to broaden local tax bases and strengthen compliance, ensuring more resilient provincial finances and reducing dependence on central transfers when facing future shocks.