Global Economic Crises and Their Impact on Fiscal Policies in Developed and Developing Nations

Abstract

This study aims to analyze the impact of global economic crises on fiscal policies in developed and developing countries by comparing their responses to the 2008 financial crisis and the COVID-19 pandemic. Using a qualitative approach through in-depth interviews and thematic analysis, the research identifies significant differences in fiscal strategies. Developed nations utilized expansionary policies supported by strong fiscal capacities, while developing countries relied more heavily on international aid and debt, prioritizing social protection with constrained budgets. The results show that developed countries, with greater fiscal capacity, are able to implement expansionary fiscal policies, such as increased government spending and economic stimulus, to mitigate the impact of the crisis. Meanwhile, developing countries, with fiscal constraints, rely more on international aid and external debt and focus on managing social inequality and reducing non-basic spending. These findings reveal the importance of more inclusive and sustainable fiscal policy planning, taking into account each country's fiscal capacity. This research also provides policy recommendations to increase the fiscal resilience of developed and developing countries in the face of future economic crises.