Webinar on Political Economy of Government Responses to Covid-19: A Cross Country Analysis: 26th June 2020

Webinar on Political Economy of Government Responses to Covid-19: A Cross Country Analysis
A Webinar on ‘Political Economy of Government Responses to Covid-19: A Cross Country Analysis’ was presented by Professor Vinoj Abraham, CDS and MrManikantha Nataraj, Doctoral Scholar, CDS over CISCO Webex Meetings on Friday, the 26th of June, 2020, at 3.30 pm. Dr Ritika Jain, Assistant Professor, CDS was the moderator of the webinar.
Abstract: In the absence of any preventive or curative medical treatment for the novel corona virus the primary concern of governments across the world had been to reduce and slow down the spread of the pandemic. Governments have resorted to an array of pharmaceutical and non-pharmaceutical measures to arrest the spread. These two sets of policies, while not exclusive to each other, presents different economic benefits and costs under varied socio-economic setting, even though their effectiveness in containing the disease may not differ much. All countries are embedded in their social, political and economic structures and it is expected that their government responses will be bounded by these structures. We argue that the degree of market orientedness of a country, the level of inequality, the depth of democracy, and average per capita income of the country determines the choice of policy against the covid. For market-oriented countries the economic costs of containment and closure would be higher than testing and isolation. Highly unequal countries with elite capture will withhold them from implementing any measures that can hinder the patrons’ profits.Yet, if health institutions are privatised and are presented with profiteering opportunities then testing policies may be preferred in such countries. Democratic governments are more transparent and accountable to its citizens. Hence, lock down policies may be viewed as curtailing freedoms.
We compiled cross-country database on degree of market, degree of democratization ,inequality and social distancing and health care policies regarding COVID-19 to test this hypothesis. The results are broadly in concordance with the expected hypothesis with highly unequal countries being less stringent in their social distancing policies.Further, market-oriented countries are found to be lenient. However, more centralised countries are found to be more stringent suggesting that it is a cheaper and preferred option for such governments. On the other hand, democratic, market-oriented and less unequal countries had spent higher in both testing and emergency health care expenditure, while having relatively less stringent lock down and social distancing policies.