Add news
Ichigo Tanuki x Angels - Gimme! Gimme! Gimme! (ABBA cover)
March 2010
April 2010
May 2010June 2010July 2010
August 2010
September 2010October 2010
November 2010
December 2010
January 2011
February 2011March 2011April 2011May 2011June 2011July 2011August 2011September 2011October 2011November 2011December 2011January 2012February 2012March 2012April 2012May 2012June 2012July 2012August 2012September 2012October 2012November 2012December 2012January 2013February 2013March 2013April 2013May 2013June 2013July 2013August 2013September 2013October 2013November 2013December 2013January 2014February 2014March 2014April 2014May 2014June 2014July 2014August 2014September 2014October 2014November 2014December 2014January 2015February 2015March 2015April 2015May 2015June 2015July 2015August 2015September 2015October 2015November 2015December 2015January 2016February 2016March 2016April 2016May 2016June 2016July 2016August 2016September 2016October 2016November 2016December 2016January 2017February 2017March 2017April 2017May 2017June 2017July 2017August 2017September 2017October 2017November 2017December 2017January 2018February 2018March 2018April 2018May 2018June 2018July 2018August 2018September 2018October 2018November 2018December 2018January 2019February 2019March 2019April 2019May 2019June 2019July 2019August 2019September 2019October 2019November 2019December 2019January 2020February 2020March 2020April 2020May 2020June 2020July 2020August 2020September 2020October 2020November 2020December 2020January 2021February 2021March 2021April 2021
News Every Day |

COVID-19: Learning From Bitter Political Experience?

Ryan Bourne

Why did some countries deal with COVID-19 better than others?

Books, academic journal articles, and PhD dissertations will be written on that subject, with analysis having to contend with a vast array of country‐​specific variables that could, conceivably, have affected public health outcomes. But public choice economics offers up one underexplored way to think about the quality of responses: as driven by political incentives.

Despite claims by economists such as Mariana Mazzucato that governments are forward‐​looking, there’s a good reason to suspect they will be ill‐​prepared when it comes to low‐​probability, high‐​risk events such as pandemics.

In part, this can be explained by electoral incentives. A classic paper by Neil Malhotra and Andrew Healy analyzed how voters responded to politicians handling natural disasters, such as hurricanes, earthquakes, and tornadoes. They found that spending on disaster prevention was highly cost‐​effective, often returning payoffs of 15‐​to‐​1. Yet when voters cast their ballots in presidential elections, candidates engaging in that type of spending saw no electoral benefit.

Increases in relief spending in reaction to disasters, on the other hand, significantly increased the incumbents’ vote share. Voters tend to reward those who react to crises by dishing out relief, in other words, but do not react to those who prevent the worst outcomes from crises by preparing. No wonder we’ve seen so much focus on checks during this pandemic.

This is, perhaps, unsurprising. Preparation or improving regulatory frameworks for emergencies is largely unobservable to the ordinary voter, especially if it is not utilized because a crisis does not actually occur. Even hearing about preparation or reform provides voters with little information about how effective it would be when the next crisis hits, so there is likely little political benefit from it. In fact, given how infrequent these types of crises are, politicians may find that their preparatory work actually ends up benefiting those who come long after them.

There are therefore strong electoral incentives that point toward spending money and political capital on observable, day‐​to‐​day government programs or transfers, and then providing extensive and rapid relief when crises do hit. As Malhotra concludes, it is perfectly rational for politicians to “kick the can down the road” because that is what, on most occasions, is in their electoral interests.

But if electoral incentives can partially explain why governments might generally underprepare for such unusual events, then how do we explain why some countries, such as South Korea, performed much better?

In my forthcoming book, Economics In One Virus, I posit that when a threat or crisis *does* emerge, the political incentives for many voters flip. The threat of a pandemic becomes salient in electoral terms in a way that it wasn’t before. Dalliance with a viral outbreak tends to change the public’s risk appetite for that type of threat. That brings with it the strong political incentive to ensure similar threats are mitigated against in future. It becomes politically popular to be ready to fight the last war.

Importantly, South Korea suffered a similar and credible threat of an infectious disease in the form of MERS as recently as 2015. The government at the time was heavily criticized for how it handled that outbreak, including for failures on testing and a lack of transparency in regard to the spread of the infection. The leader of South Korea’s opposition harshly criticized the administration, saying that the government had lost the people’s trust. That critic is now the president of South Korea, Moon Jae‐​in. In response, the country completely rewrote its infectious disease prevention legislation. Politicians reacted in part because there was a political imperative to do so.

The crisis was a short enough time ago that it was still a pertinent political issue in 2020. As a result, Korea was ready when this crisis hit: the country swiftly implemented smarter “containment” policies that focused on monitoring international arrivals, temporary school closures, a permissive regulatory approach to testing, screening, and use of contact tracing, self‐​quarantines incentivized via fines and support, and extensive public health guidance on mask wearing and social distancing. Crucially, this quicker action obviated the need or demand for the cruder, more destructive stay‐​at‐​home orders and business closures used in many Western countries.

Some of Korea’s policies, particularly the contact tracing efforts, would be anathema to libertarians on civil liberties grounds. But, overall, who has seen more liberty this past year, South Koreans or Americans? Since April 2020, at least, the Oxford Stringency Index for government COVID-19 restrictions has been consistently higher in the United States than South Korea.

While public policies clearly do not drive all outcomes, the headline results are striking: South Korea has seen 34 COVID-19 deaths per million population; the US has seen 1,700 deaths per million. South Korea currently has an unemployment rate of 4.9 percent, with it being much lower than this for most of the past year; here the unemployment rate is currently 6.2 percent, having been as high as 14.8 percent last year.

By cherry‐​picking two countries, of course, we can prove just about anything. But in a new paper published in the Centre for Economic Policy Research’s COVID Economics series, economists Alexandra Fotiou and Andresa Lagerborg test the thesis that past run‐​ins with viral outbreaks of SARS in 2003 and MERS led to better COVID-19 performance.

Their results suggest they did: these countries (a list which includes Taiwan, Singapore, Vietnam, Canada, and Hong Kong, as well as South Korea) tended to enact a much faster response with targeted closures or screening at high risk venues, including airports, and were more likely to embrace testing and guidance, rather than crude lockdowns. Overall, as a result of early action and better targeting, they enjoyed less restrictive measures on people’s lives for 2020 overall. As a result, past experience with these threats is significantly associated with lower Covid‐​19 deaths per capita and higher real GDP growth in 2020, results that are robust to controlling for the age of the population.

There are likely all sorts of other country‐​specific factors that these economists might be missing. But so far in discussing “why did we fail?” we tend to overfocus on individuals and particular decisions, while underfocusing on the electoral incentives politicians faced over long periods of time.

For much more on the economics of the pandemic, you can pre‐​order my book Economics In One Virus on your country’s Amazon store.

Read also

The Johnson & Johnson shot was a ‘godsend’ for the most vulnerable. Now it may be hindering efforts to vaccinate them.

Who is Penelope Knatchbull and how did she know Prince Philip?

The Best Granola Brands To Bring On Your Next Hike

News, articles, comments, with a minute-by-minute update, now on — latest news 24/7. You can add your news instantly now — here
News Every Day

How To Cut Every Cheese Method Mastery Epicurious