COVID-19: Cost-Benefit Analysis and Politics

Abstract

The COVID-19 pandemic forced governments around the world to make tough political decisions about the cost of saving lives and the limits of doing so. One of the striking aspects of the debates over these necessary tradeoffs is the relatively little weight individual rights seemed to have carried in these discussions. At first, this might have seen the triumph of cost-benefit analysis (CBA); and in a sense, it was. However, the pandemic has also shown the limitations of CBA, especially in the face of severe uncertainty. This essay reviews some of the sources of uncertainty in the context of the pandemic and shows how, in the face of such uncertainty, different countries fall back onto their political commitments, which include concern for individual rights. I thus argue that rather than being in competition to CBA, political considerations (including concern for individual rights) end up being incorporated into an impressionistic calculation of costs and benefits of government action. I conclude by suggesting that this is where future discussion of the theoretical foundations of CBA should focus on.

Keywords: Cost-benefit analysis, COVID-19, health policy