Health vs. Economy: Politically Optimal Pandemic Policy

27 Pages Posted: 6 Aug 2020 Last revised: 12 Oct 2020

See all articles by Desiree Desierto

Desiree Desierto

University of Rochester

Mark Koyama

George Mason University - Department of Economics; George Mason University - Mercatus Center

Multiple version iconThere are 2 versions of this paper

Date Written: September 30, 2020

Abstract

Pandemics have heterogeneous effects on the health and economic outcomes of members of the population. To stay in power, politician-policymakers have to consider the health vulnerability-economic vulnerability (HV-EV) profiles of their coalition. We show that the politically optimal pandemic policy (POPP) reveals the HV-EV profile of the smallest, rather than the largest, group in the coalition. The logic of political survival dictates that the preferences of the least loyal, most pivotal, members of the coalition determine policy.

Keywords: Pandemics, COVID-19, Political Economy, Selectorate Theory

JEL Classification: D7, H12

Suggested Citation

Desierto, Desiree and Koyama, Mark, Health vs. Economy: Politically Optimal Pandemic Policy (September 30, 2020). Available at SSRN: https://ssrn.com/abstract=3661650 or http://dx.doi.org/10.2139/ssrn.3661650

Desiree Desierto

University of Rochester ( email )

300 Crittenden Blvd.
Rochester, NY 14627
United States

Mark Koyama (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://mason.gmu.edu/~mkoyama2/About.html

George Mason University - Mercatus Center ( email )

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Arlington, VA 22201
United States

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