Are Disasters a Risk to Regional Fiscal Balance? Evidence from Indonesia

International Journal of Disaster Risk Science

Alin Halimatussadiah¹  Astrid Wiyanti² 

[1] Department of Economics, University of Indonesia, 16424, Depok, Indonesia;Economic Planning and Development Policy, University of Indonesia, 10440, Jakarta, Indonesia;Center for Climate Finance and Multilateral Policy, Fiscal Policy Agency, Ministry of Finance of Indonesia, 10710, Jakarta, Indonesia;

关键词: Budgetary solvency;    Disaster impacts;    Disaster insurance;    Fiscal balance;    Indonesia;    Local government budgets;   

DOI  :  10.1007/s13753-021-00374-2

来源: Springer

【 摘 要 】

Indonesia is an archipelago country and is fairly vulnerable to disasters. While disasters generally affect government revenue and expenditure, their effects likely vary by country. This study examines the effect of disasters on the fiscal balance, revenue, and expenditure of local governments. We used panel data and fixed effects methods to estimate the degree to which disaster severity influences budgetary solvency at the district and provincial levels in Indonesia between 2010 and 2018. This study revealed that disasters can strain fiscal balance at the district and provincial levels due to a decrease in own-source revenue and an increase in social assistance expenditure, capital expenditure, consumption expenditure, and unexpected expenditure. The district expenditure most threatened by disasters is consumption expenditure, while the provincial expenditure most threatened is unexpected expenditure. We also found that an increase in capital expenditure can lead to financial burden due to delays of planned projects or post-disaster reconstruction. Based on these findings, it is clear that some forms of insurance or other financing schemes are necessary to mitigate the adverse impacts of disasters on regional fiscal balance.

【 授权许可】

CC BY