National Containment Policies and International Cooperation

18 Pages Posted: 8 May 2020

See all articles by Thorsten Beck

Thorsten Beck

City University London - Sir John Cass Business School; European University Institute; Centre for Economic Policy Research (CEPR)

Wolf Wagner

Erasmus University Rotterdam (EUR)

Multiple version iconThere are 2 versions of this paper

Date Written: April 2020

Abstract

Policies that curtail social and economic activities during a pandemic are predominantly decided upon at the national level, but have international ramifications. In this paper we examine what type of inefficiencies this may create and how cooperation across countries may improve outcomes. We find that inefficiencies arise even among completely identical countries. We show that countries are likely to choose excessively lenient policies from the perspective of world welfare in later stages of the pandemic. This provides a rationale for setting minimum containment standards internationally. By contrast, in early and intermediate stages of the pandemic, national containment policies may also be excessively strict. Whether or not this is the case depends on country's degree of economic integration relative to (outward and inward) mobility of people.

Keywords: Covid-19 pandemic, cross-border cooperation, externalities

JEL Classification: F2, F5, F6, I1

Suggested Citation

Beck, Thorsten and Wagner, Wolf, National Containment Policies and International Cooperation (April 2020). CEPR Discussion Paper No. DP14668, Available at SSRN: https://ssrn.com/abstract=3594301

Thorsten Beck (Contact Author)

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

European University Institute

Villa Schifanoia
133 via Bocaccio
Firenze (Florence), Tuscany 50014
Italy

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Wolf Wagner

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

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