Public Finance in the Era of Polycrisis: An Integrated Approach to the Challenges of Multiple Crisis Factors

Abstract

This paper explores the concept of polycrisis through its implications for public finance, focusing on the challenges that multiple and interconnected crisis factors pose for fiscal stability and policy design. From early industrialization to the contemporary phase of globalization and digitalization, economic expansion and technological advancement have intensified systemic interdependence and increased exposure to multidimensional shocks. Climate change, energy insecurity, health emergencies, and geopolitical tensions now emerge simultaneously and mutually amplify their effects, creating persistent fiscal pressures on governments. Rising expenditures related to healthcare, social protection, and climate transition policies, combined with declining revenues during economic downturns, contribute to growing public debt and fiscal instability. Recent events, particularly the COVID-19 pandemic, have highlighted the limitations of traditional short-term fiscal responses to systemic crises. In this context, the paper argues that managing public finance in the era of polycrisis requires integrated, adaptive, and transparent fiscal frameworks capable of addressing complex and interconnected risks. The study advances the hypothesis that fiscal stability under conditions of polycrisis depends on the development of flexible and internationally coordinated fiscal approaches. Recognizing the synergistic interactions among crisis factors and adopting multidimensional policy responses can strengthen fiscal resilience and support sustainable economic and social stability.