Can Governments Deal with Pandemics?

Abstract

While few economists dispute that governments should have some role in dealing with pandemics, the relevant institutional question is whether governments can deal with pandemics. In this article, we argue that there are trade-offs embedded with the provision of public health measures. States that are better able to effectively deal with pandemics require a great deal of capacity to implement coercive measures such as economic lockdowns or quarantines. Such capacity is associated with a lesser ability to generate economic growth and harness its palliative effects with regards to other health dimensions. As a nation’s institutions are “bundles” (i.e. one takes the wheat with the chaff), there are nations doomed to deal poorly with pandemics, at least in the short run. Despite the positive and normative case for government-involvement in public health, effective involvements may be outside the range of institutional possibilities.

Keywords: Public health, political economy, smallpox, COVID-19, institutions, economic history

JEL Classification: I15, I38, H40