The impact of public policy on budget realization during the COVID-19 pandemic in Indonesia

Budget changes triggered by internal factors intend to realize budget effectiveness and save the budget. Meanwhile, Refocusing Activities and Budget Reallocation (RABR) tends to disrupt budget realization because external factors trigger it. This research focuses on the impact of budget policy during the COVID-19 pandemic in Indonesia. This research seeks empirical evidence of differences in budget absorption, tax revenues, and local revenue before and during RABR. This research contributes to filling the micro research gap regarding RABR policy and becomes a reference for public policy stakeholders. This study uses quantitative methods. Data published by 91 cities for four years, namely two years before RABR (2018-2019) and two years during RABR (2020-2021), were analyzed using descriptive statistics and difference tests. Data for 2022-2023 are also used to test robustness. The results of statistical tests show a decrease in budget absorption, tax revenue, and local original income during the implementation of the RABR policy. The results of the Wilcoxon test statistics for hypothesis testing and robustness tests conclude the same thing, namely that the levels of budget absorption, tax revenue, and local revenue before and during the implementation of RABR are significantly distinct.