Fiscal support during the COVID-19 pandemic and its determinants: evidence for OECD countries

This study examines the factors influencing governments' fiscal support strategies during the pandemic, aiming to contribute to sustainable development. Through an analysis of data from 34 prominent economies, representative of OECD countries, up to the conclusion of 2022, and utilizing GMM regression analysis, we challenge conventional economic theories. Contrary to expectations, governments opted to reduce tax rates amid the pandemic, resulting in decreased revenue due to lockdown-induced economic disruptions. These findings underscore the imperative of expanding fiscal support during pandemics for progress toward Sustainable Development Goals (SDGs), particularly SDG 3 (Good Health and Wellbeing) and SDG 10 (Reducing Inequality).