The return of Keynesianism? Exploring path dependency and ideational change in post-covid fiscal policy

Abstract

The aim of this article is to explore the nature of policy change in the domain of public finance (fiscal policy) in the wake of the coronavirus disease (Covid-19) pandemic as well as for a post-Covid era. It draws upon the literatures of path dependency and ideational change in public policy to consider three broad questions: (1) whether the pandemic really is a critical juncture for policy change; (2) whether the extant neoliberal austerity paradigm has faced lasting ideational displacement by Keynesianism; and (3) whether Covid-19 has really punctuated the existing fiscal policy equilibrium or rather served as a path-clearing accelerator of public finance trends that were already underway. The article then suggests three potential future trajectories: Keynesian, neoliberal, and mixed/other to consider how the path of policy change might materialize in the fiscal realm in the post-Covid era.