Policymaking in the age of the virus

Covid-19 has caused roughly 3 million deaths worldwide so far and it’s devastated the economy. Even though vaccination drives are now on everywhere, the crisis is far from over. Indeed, the second wave of mutant viruses could be even more dangerous.

Different nations have dealt with the threat in different ways. What sort of regimes have handled the pandemic better in terms of minimising deaths, providing better healthcare services, and minimising economic disruption? 

More than a year after WHO raised the pandemic alarm, we have a body of evidence. This isn't just an academic debate: Policymakers must deal with an ongoing situation and need to learn from the successes and failures of 2020. 

In terms of relatively low mortality and economic stability, Germany, New Zealand, Japan, Vietnam, Taiwan and South Korea seem to have weathered 2020 reasonably. The poor performers include the US, Brazil, Italy, the UK and Russia in terms of both high numbers of deaths, and great economic damage. India has done okay so far in terms of deaths. But it’s bottom of the pile in terms of economic loss. It’s hard to know what the case numbers and deaths were in China, but the People’s Republic of China has got its economic act together post-Wuhan.

Mauro Guillén, a sociologist at Wharton, has written a working paper, The Politics of Pandemics: Democracy, State Capacity, and Economic Inequality. This looks at epidemics and their management across 146 countries since 1990, in terms of the mentioned parameters.

He conducted three studies on “epidemic dynamics.” The first reviewed the occurrence and lethality of epidemics between 1990 and 2019. The second looked at the speed and severity of government-mandated lockdown during Covid-19.  The third examined compliance with social-distancing measures.

“In democracies, greater transparency, accountability, and public trust reduce the frequency and lethality of epidemics, shorten response time, and enhance people’s compliance with public health measures,” Mr Guillén asserts.

Unfortunately, as the annual Global Democracy Index indicates, the quality of democracy has been declining. This has led to a lack of trust, which has meant people refusing to social distance, wear masks, or take vaccines.

One of the more interesting findings is that, more than forms of government, economic inequality increases epidemic impact and affects mass compliance with quarantine, social distancing, etc. Lower income folks cannot afford to not work. There’s incentive to ignore mild symptoms, and avoid testing if the patient cannot afford to be laid off. Moreover, lower income is associated with poorer nutrition, inadequate access to healthcare and crowded, insanitary habitation.

Strong state capacity and good policy can help mitigate poor outcomes and prevent the exacerbation of income inequality. 

Mr Guillen believes both democracies and authoritarian regimes can possess the necessary resources and capacity, and the needed organisational structures. In any event, democracy or not, the consequences are worse if there are larger inequalities.

This seems to make intuitive and empirical sense. The US, India and Brazil all have very high degrees of inequality.  Unfortunately for India, the ham-fisted lockdown led to a widening income gap, as millions lost livelihoods.

The US is lucky in that it has undergone regime change, which has led to more sensible policy, though that’s not saying much, given the record of the previous incumbent of the White House. The Biden administration has rolled out an impressive vaccination programme, and coupled that to relief via stimulus cheques.

In India, there’s currently evidence the Centre has not managed a smooth vaccine rollout. It is now falling back on blaming states, which are facing vaccine shortages. Political considerations have also led to the scheduling of multiple elections, and an out-of-turn Kumbh Mela. These are guaranteed super-spreader events.

On the economic front, whatever demand revival has occurred has come despite high taxes on fuel and a tighter goods and services tax regime. The 2020 lockdowns crippled economic activity so badly that a second lockdown would give lower income people the choice between starvation, and breaking the law and risking infection. It remains to be seen if this government can improve vaccination rollout and put together a coherent stimulus plan.