Increasing Public Expenditures Due to COVID-19 Pandemic Crisis: An Assessment According to Peacock-Wiseman Hypothesis

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AbstractAlthough the COVID-19 pandemic crisis is basically a health crisis, it does not only concern health policies due to its economic and social effects. In the fight against the pandemic, it is important to implement economic, social and financial policies as well as health policies. In this context, effectively using the public spending tools of fiscal policy in the fight against the COVID-19 pandemic has become a priority rather than a political choice for governments. In times of pandemics, sufficient increase in public expenditures is an effective political tool for governments in order to prevent the decline of the economic growth process, loss of welfare, large-scale unemployment and supply problems. Considering the Peacock-Wiseman Hypothesis in the public finance literature, if public expenditures are used as an effective policy tool in the COVID-19 pandemic crisis, a leap in public expenditures is likely. This study evaluates the relationship between the COVID-19 pandemic crisis and public expenditures and reveals the public expenditure policies of selected countries in the fight against COVID-19. It can be said that there is a positive relationship between the level of development of countries and the increase in public expenditures in the COVID-19 pandemic crisis. It is seen that developing economies mostly resort to credit instruments, while developing countries mainly use public expenditure instruments, they also use credits and supports sufficiently. However, due to the continuation of the COVID-19 pandemic crisis, obtaining definitive results will emerge in post-pandemic studies. For this reason, the final results of this study will become clear with the studies carried out after the pandemic crisis.KeywordsCOVID-19PandemicPublic expendituresPeacock-Wiseman hypothesisPublic policiesEconomic crisis