Showing posts with label pandemic. Show all posts
Showing posts with label pandemic. Show all posts

Tuesday, December 14, 2021

What have you been thinking about this year?


 

I expect that many readers of this blog will have spent some time this year thinking about the response of governments to the COVID-19 pandemic. That is a topic I have been thinking about, but I have not previously blogged about it this year. I wrote about it on this blog in March and October 2020. With the benefit of hindsight, I think that what I wrote then is defensible, although not particularly illuminating.I set out to write something about the costs and benefits of lockdowns a few weeks ago, but got sidetracked into considering the WELLBY approach to assessing the value of a human life. I thought I might write on that topic in this article but after some additional reading I have decided to adopt less ambitious objectives. My objectives are to consider:

  • why there is disagreement on such basic issues as whether lockdowns work;
  • whether it would be desirable to have a uniform regulatory approach in all jurisdictions; 
  • what we should learn from policies adopted in East Asia; and
  • how we should be thinking about government intervention.

Do lockdowns work?


I don’t think disagreement about the effectiveness of lockdowns can be attributed solely to the ideologically blinkers of the participants in policy debates. Some people who are not ideologically opposed to much other government regulation – including Paul Frijters, Gigi Foster, and Michael Baker (authors of The Great Covid Panic) claim that lockdowns do not prevent deaths. On the other side of the debate, some classical liberals who are opposed to much government regulation, nevertheless saw merit in lockdowns - at least during the early stage of the pandemic - to buy time to enable hospitals to prepare for an influx of patients requiring treatment.

The reasoning behind lockdowns is that if you can get people to stay far enough apart from each other, they cannot infect each other. The most obvious problem in getting people to stay at home that is that they need to go to shops to buy food and, in some instances, to deliver health and other “essential” services.  

Lockdowns seemed to suppress virus transmission in Australia in the first half of 2020. In October 2020 I suggested that the combination of self-isolation, shutdowns and lockdowns had worked well in April and May of that year. I have become more pessimistic about the efficacy of lockdowns in Australia this year.  Lockdowns seem to have become less effective in Australia in presence of more infectious strains of the virus, and a decline in public support for lockdowns which was particularly evident in Melbourne - the world’s most locked down city.

Some evidence from other parts of the world suggests that lockdowns have never been effective in reducing death rates. For example, despite its relatively elderly population, Florida did not experience higher death rates than other regions of the United States after abandoning lockdown policies.

The chart shown above (based on a survey conducted by YouGov, an international research data and analytics group) suggests an important reason why the effectiveness of lockdowns is likely to depend on context. Willingness to comply with such regulations is much higher in some countries than others. I think the relatively high compliance level in Australia reflects strong public support for the regulations rather than the substantial penalties that applied if non-compliance was detected. The regulations were difficult to police even in the presence of strong public support, and would have been impossible to police if blatant non-compliance had become widespread.

Would it be desirable to adopt a uniform approach in all jurisdictions?

Differences in support for regulation and associated differences in willingness to comply, are good reasons for different approaches to be adopted in different jurisdictions.

Frijters et al suggest a more fundamental reason why a diversity of approaches is desirable. After noting the value of state-level experiments in the United States, including the minimalist policies adopted in South Dakota, the authors suggest:

“The provocative takeaway is that the intelligence of a whole country is enhanced when it contains communities adhering to truths completely opposed to those of the intellectual elites. That takeaway is, moreover, a deep lesson from history that Western countries have embedded into their institutions over centuries. It has been remarked upon before by historians that competition between radically different systems leads Western countries to learn faster than more centralised places like China.”   

What should we learn from the policies adopted in East Asia?

The experience of East Asian countries in preventing deaths from COVD-19 has been held up as example for others to follow. For example, an article by Mingming Ma,  Shun Wang, and Fengyu Wu, published as Chapter 3 of World Happiness Report 2021, concludes as follows:

“In general, we find that the relatively successful story of the five East Asian regions, compared with the six western societies, can be attributed to the stronger and more prompt government responses and better civic cooperation. Except for Japan, all of the East Asian governments implemented more stringent mobility control and physical distancing policies, as well as more comprehensive testing and contact tracing, especially at the early stages of the outbreak. A summary of the government interventions and anti-COVID measures in the East Asian regions indicates that a combination of strong government response systems, early and rigorous mobility control, extensive screening, testing, contact tracing and isolation, coordinated resource allocation, clear communication, enforced self-protection practice, and supportive economic measures are important in fighting COVID-19 outbreaks and resurgence.”

The five East Asian jurisdictions referred to are China, Hong Kong, Taiwan, Japan, and South Korea. The six Western countries included in the study for comparative purposes were France, Germany, Italy, Spain, the United Kingdom, and the United States.

 The authors seem to be suggesting that all the East Asian jurisdictions adopted stringent policy responses.

Frijters et al reach a different conclusion using the same data on policy stringency in a study published in Chapter 3 of The Great Covid Panic. The authors group countries and regions into three categories, Minimalists, Pragmatists, and Covid Cults, on the basis of the stringency of the average stringency of their policies during 2020. They found that the minimalists had far fewer claimed Covid deaths than either the pragmatists or the cults and that the pragmatists accumulated only a little over half the death rate of the cults.

It is interesting that most of the East Asian jurisdictions referred to in the first study were classified as either minimalists or pragmatists. Taiwan and Japan were classified as minimalist, and South Korea was classified as pragmatist. The United States and most European countries were classified as cults, along with China, Australia and New Zealand.

It is certainly difficult to maintain that stringency has been a major factor explaining the relative success of policy responses in the East Asia region.  I am not sure what other conclusions can be drawn, except that further study will be required if we are to learn from the experiences of countries adopting different policy responses.

How should we be thinking about government intervention?

Many politicians and other commentators seem to imply that apart from lives lost (or saved) the only other factor that needs to be considered in evaluating policy responses to COVID-19 is their impact on GDP. Far too little account is taken of the future consequences of increases in public debt that have been incurred to support people during lockdowns and the psychological impacts of restricting social interactions for long periods.

When freedom is mentioned by advocates of stringent regulation, it is often viewed as something frivolous that must be sacrificed to prevent deaths from Covid. That is the way a bureaucrat might view the options if given prevention of deaths from Covid as a key performance indicator (KPI). Within that mindset, freedom must be sacrificed to a sufficient extent to ensure that lockdowns work. Prevention of deaths from Covid is seen as being of utmost importance. Just as some soldiers have claimed that they had to destroy villages in order to save them, the single-minded advocates of lockdowns seem to be willing to destroy people’s lives in order to save them.

I am not implying that freedom is more important than health, or that liberty is more important than human flourishing. I am just suggesting that it is unhelpful to view the issues in that way.  

About 15 years ago, after reading some of the writings of Douglas Rasmussen and Douglas Den Uyl, I realized that it makes no sense to think in terms of a need to choose whether priority should be given to liberty or to human flourishing. Human flourishing does not exist apart from the flourishing of individuals, and the flourishing of individuals is not possible without opportunities for self-direction. Once we recognize the importance of self-direction to individual flourishing, that poses the question of what rules of the game – or political / legal order - would allow greatest opportunities for individual self-direction. Liberty is the answer! The protection of individual liberty – or the natural rights of individuals – provides the context in which individuals can flourish in different ways, provided they do not interfere with the rights of others. (You can find further explanation and links to the works of Rasmussen and Den Uyl in my book, Freedom, Progress, and Human Flourishing.)

Recognition of the foundational role of liberty doesn’t tell us what rules of the game should apply in a pandemic. However, it does tell us that we should be looking for rules of just conduct that would provide an appropriate balance between the different interests of individuals in getting on with their lives and avoiding exposure to infection.

The discussion earlier in this article suggests:

  • The most appropriate rules in any society must depend, to a large extent, on the degree of support for them.
  • A diversity of approaches in different jurisdictions is highly desirable to provide greater opportunities to learn from the experience of others.
  • Different interpretations of the East Asian experience suggests that some caution is required to ensure that we learn the right lessons from the experience of others.

Saturday, October 24, 2020

Have we got the balance right between freedom and protecting the vulnerable?

 


It is appropriate to be thinking seriously about the question posed above during the COVID-19 pandemic.

The extent to which it is appropriate for personal freedom to be sacrificed to protect the vulnerable depends on context. The consequences of viewing either freedom or protecting the vulnerable to have priority depend on the prevalence of the virus in different communities and on the means available to protect vulnerable people who are unable to self-isolate. Personal values are also involved; the responses suggested by public health officials are not always in harmony with the values of ordinary people.

Some people see no trade-off between freedom and protecting the vulnerable. At one end of the spectrum, one group in that category considers that personal freedom always trumps all other considerations, irrespective of context. At the other end of the spectrum, a different group argues that eliminating the virus trumps all other considerations – they suggest that we cannot protect the vulnerable or enjoy much freedom unless we eliminate the virus.

My response to those who argue that personal freedom always trumps all other considerations is that they should consider Friedrich Hayek’s observation that the norms of just conduct that evolved to protect the private domains of individuals (life, liberty and property) tend to change somewhat depending on context. There may be good reasons for the private domains of individuals to be defined differently during the extraordinary circumstances of a war or famine. Similarly, behaviour that is appropriately held to be wholly in the private domain of individuals can become problematic during a pandemic. For example, it is appropriate for norms regarding physical distancing to have changed to reduce infection risks for vulnerable people.

My response to those who claim that elimination of the virus should trump all other considerations is to point to the futility of attempting to achieve that objective. Outbreaks have continued to occur even in isolated communities where there have been no known active cases for months (e.g. New Zealand). It is unlikely that the virus will ever be eliminated, even if an effective vaccine becomes widely available. An ongoing suppression strategy inevitably requires ongoing restrictions on personal freedom, so trade-offs are inevitable.

Different strategies for protecting the vulnerable have different implications for personal freedom, and hence different consequences for psychological health and livelihoods. The broad choice is between focused measures aimed at protecting members of vulnerable groups (e.g. people in nursing homes) and general measures aimed at reducing community transmission. Focused measures involve some restrictions on freedom (e.g. restricted conditions for visiting family members in nursing homes) but attempting to achieve similar protection via general measures to reduce community transmission involves much greater restrictions of freedom.

There seems to have been a general tendency to use a combination of focused and general measures in most parts of the world. That may make sense in communities where the number of active cases of infection is rising rapidly, but involves excessive restriction of freedom where the number of cases in low and relatively stable.

Back in March, I argued that a period of lock-down was warranted in Australia to buy time to help cope with an expected influx of hospital patients, and to put testing arrangements in place to enable infectious people to be quarantined. That was a common view at the time, and similar reasoning was used by federal and state governments to justify lock-downs. The lock-downs were introduced following large scale voluntary self-isolation and shut-downs of businesses whose customers were staying home.

However, the strategy had unintended consequences. The combination of self-isolation, shut-downs and lock-downs worked so well to suppress virus transmission that some state governments shifted the goal posts. They closed state borders in an apparent attempt to eliminate the virus within their states.

Subsequently, the government of Victoria responded to a second-wave virus outbreak by adopting an obsessive suppression strategy to reduce transmission rates. A severe lock-down was introduced, placing the residents of Melbourne in virtual home detention for several months.

There is little doubt that the Victorian lock-down reduced transmission rates to a greater extent than would otherwise have occurred, but the burden imposed on Victorians seems to have been excessive. A more focused approach could have protected the vulnerable with less loss of freedom to the rest of the Melbourne community.

Perhaps the severe approach adopted will enable Victorians to travel interstate sooner than would otherwise be possible. However, like people in New South Wales, they still have little chance of visiting Western Australia over the next few months, and would be wise to exercise extreme care in making plans to travel to Queensland.

The federal government’s provision of additional assistance to unemployed people and businesses reduced the human misery that would otherwise have accompanied the restrictions on personal freedom imposed by state governments. As noted earlier, those restrictions include closure of state borders, which has been detrimental to tourism. It seems unlikely that such stringent measures would have been introduced if the state governments had to fund associated additional welfare payments from their own coffers.

The objective of governments in Australia – federal and state - now seems to be to get to “COVID-Normal”. That involves ongoing restrictions on large gatherings, distancing rules, sign-in rules for pubs and restaurants, and constant hectoring by politicians and public health officials about the need for vigilance. There are plans to reduce some restrictions on interstate travel, and there is talk of allowing international travel to and from a few countries with similarly low infection rates. However, a return to normal international travel to and from Australia looks to be a long way away. 

Getting to COVID-Normal, means that Australians will be continuing to live in La La Land. For the next few months, we will congratulate ourselves about the amount of personal freedom that we enjoy relative to people in the United States and Europe, where infection rates are much higher. However, I doubt that there will be as much self-congratulation in 12 month time.

At some stage Australians will need to think seriously about how we can make the transition from COVID-Normal to living in the real world. What could be done to enable that to happen within the next 12 months?

There are grounds to hope that an effective vaccine will begin to become available within a few months, but under current government policies that seems unlikely to enable life to return to normal within a reasonable time frame. An effective vaccine could enable those most vulnerable to the virus to be protected early next year, and hence may offer potential for life to get back to normal without much delay. However, effective protection of the most vulnerable seems unlikely to be sufficient to persuade state government health departments to let go of their single-minded suppression strategies. Given the climate of fear state health officials have helped to generate, consideration of personal career interests (ass protection) will continue to make them more concerned about potential COVID-19 outbreaks than about other factors affecting the health and wellbeing of citizens. For similar reasons, State premiers can be expected to continue to hide behind the advice of public health officials, rather than to make balanced decisions to protect livelihoods as well as lives.

It seems to me that Australians should be giving serious consideration to the approach advocated in the Great Barrington Declaration (GBD) of a group of infectious disease epidemiologists and public health scientists. The GBD advocates focused protection of those most vulnerable, whilst allowing the rest of the community to live their lives normally and to build up immunity through natural infection.

The GBD approach offers the best hope we have of life returning to normal in a reasonable time frame. If we do not get an effective vaccine or treatment, natural immunity offers the only hope that life can ever return to normal. If an effective vaccine or treatment becomes available over the next few months, that will remove most of the risks associated with the GBD approach. As I see it, there is no good reason why life in Australia should not return to normal very soon after vulnerable people have been offered the protection of a vaccine.

Thursday, March 26, 2020

How can governments mitigate the impact of COVID-19 on human flourishing?



This is an appropriate question for economists with an interest in public policy to be considering. It recognizes a possible role for governments and recognizes that an approach focused on human flourishing is likely to be more appropriate than one focused entirely on reducing the death rate or reducing adverse impacts on GDP.

The possible role for government stems from the perception that people who are most vulnerable would not able be to protect themselves adequately without some government intervention. People who know they are vulnerable have a strong incentive to practice social distancing, but personal circumstances often make that difficult. Without the threat of coercion, it is unlikely that we will see the degree of social distancing necessary to reduce the rate of spread of the virus. In that event, hospital services are likely to be over-whelmed by the number of people requiring treatment. 

As always, with government intervention, there is a risk that the cure will end up worse that the disease, but the risk is probably worth taking in this instance.

What is the appropriate indicator of human flourishing to be used as a policy objective? There isn’t just one! The prime candidates, per capita GDP and average life satisfaction both suffer from the same flaw – they don’t account for the impact of early death on the well-being of the dear departed. We should continue to consider the impacts of policies on death rates as well as their impacts on the well-being of the living.

Per capita GDP was never intended to be a measure of well-being, but it is relevant. Many factors that impinge on well-being – such as the ability of people to afford food, housing and health care – are influenced by per capita GDP levels. However, per capita GDP cannot account for impacts of coercive policy interventions, such as enforced home confinement, on psychological well-being.

Average life satisfaction seems to be a reasonable indicator of the average psychological well-being of groups of people. It is a poor indicator of economic and social progress because it doesn’t account for the extent that members of one generation perceive themselves to be better off, or worse off, than members of preceding generations. Fortunately, that deficiency is not pertinent for present purposes.
There is some evidence that lock-down and GDP decline have potential to have substantial negative impacts on average life satisfaction.

An article entitled ‘Health, distress and life satisfaction of people in China one month into the COVID-19 outbreak’, has recently been published by Stephen X Zhang, Yifei Wang, Andreas Rauch, and Feng Wei. The article is a pre-print and has not been subjected to peer review, but no major flaws are obvious to me. As might be expected, the study suggests that the life satisfaction of people with chronic medical conditions was adversely affected in locations with severe outbreaks of COVID-19.

However, the life satisfaction of people who exercised a lot was also adversely affected in locations with more severe outbreaks, suggesting frustration at restrictions imposed. Those who were able to continue to work had higher life satisfaction than those who had stopped work, with people who were able to work “at the office” having higher life satisfaction than those who worked at home.

The relationship between per capita GDP and average life satisfaction is complicated. Average life satisfaction is relatively high in countries with high per capita GDP, but tends to grow very slowly, if at all, as per capita GDP rises further in such countries.  However, there is some evidence suggesting that when per capita GDP falls in high-income countries, this is likely to be accompanied by substantial declines in average life satisfaction. Austerity in Greece reduced per capita GDP by about 26% over the decade to 2017 and was accompanied by a decline in average life satisfaction of about 20% (GDP data from OECD and life satisfaction data from World Happiness Report, 2020).

Hopefully, COVID-19 will result in much smaller declines in per capita GDP than in Greece. and economic recovery will be much more rapid.

What are the trade-offs involved in shut-down? The human welfare implications of shutting down large parts of an economy for an extended period are enormous. However, a short close-down of all those activities in which social distancing is difficult might be preferable to a less severe and more prolonged lock-down. Tomas Pueyo’s discussion of the hammer and dance (see graphic above) makes sense to me, even if the Hammer needs to last more than 3-7 weeks.

Social distancing and lock-down is an investment in buying time. Buying time for what? It can’t be for development of a vaccine. That will take too long!

It makes sense to buy time to build up the stock of respirators, ICU beds etc. to help cope with an influx of hospital patients needing treatment.

It also makes sense to buy time to obtain testing equipment that can give accurate results within a short time frame. Speedy and accurate testing has potential to enable infectious people to be detected and temporarily taken out of circulation, so that the rest of the population can return to something like normal life.

This post has not yet referred to stimulus packages. I support giving money to people to help them survive a crisis that is likely to depress aggregate demand. Please note, however, that what people can buy depends ultimately on what is produced. When an economy closes down the necessities of life tend to become scarce.

My conclusions:
  • Policies to mitigate COVID-19 should be considered from a human flourishing perspective rather than solely in terms of either minimizing deaths or minimizing damage to an economy.

  • The best policy seems to be to buy time by enforcing strict social distancing for a relatively short period rather than less strict distancing for a longer period. The policy aim should be to buy enough time to enable hospitals to cope better with an influx of patients and to put in place a testing regime that can enable life to return to something like normal as soon as possible.
Postscript: May 6, 2020
There isn’t a great deal of substance that I would like to change in this article with the benefit of 6 weeks hindsight. The graphs showing possible outcomes in terms of exponential growth and bell curves still look right. Some countries, including Australia, have moved along to the end of “the hammer” phase of the bell curve and are beginning the tricky “dance”. Perhaps infection rates may be greatly under-estimated and there is now considerable herd immunity, but I doubt it.

Although the governments of some countries are behaving abominably, at this stage I am confident that in Australia the intervention ‘cure’ (palliative might be a better word) will not be worse than the disease. To a large degree, the shutdown occurred spontaneously, with governments playing catchup, as large numbers of people stayed home, and businesses shut down. There has been some coercion, e.g. shutting of beaches in metropolitan areas and travel restrictions. Some police have risked public goodwill by excessively diligent (stupid) enforcement, e.g. picking on individuals sunning themselves in parks many metres away from any other human. Most people seem to be following social distancing rules because they accept that it is a sensible precaution to take for their own benefit and/or the benefit of others.

From an analytical perspective, I have been reminded that it is possible to incorporate deaths and economic considerations in a common metric if you try hard enough. Richard Layard, Andrew Clark et. al. have presented a WELLBY analysis that seeks to do that in a paper entitled, ‘When to release the lockdown: A wellbeing framework for analysing costs and benefits’. The authors use estimates of wellbeing-years (based on life satisfaction surveys) to balance the impact of policy decisions upon the number of deaths from COVID-19 against incomes, unemployment, mental health, public confidence and other factors (including CO2 emissions).

Their analytical framework looks elegant, but I am concerned about the implied policy context. It seems to me that this kind of analysis is more relevant to decision-making by a benevolent dictator (one applying utilitarian philosophy) than to a society where government should see its prime responsibility as protecting the lives and liberty of citizens.

Another article that has been brought to my attention is: ‘Some basic economics of COVID-19 policy’, by Casey Mulligan, Kevin Murphy and Robert Topel. This article looks at the trade-offs we face in regulating behavior during the pandemic.  It uses conventional cost benefit analysis to consider several possible policy objectives, including buying time and limiting the cumulative cost of a pandemic that will ultimately run its course. They conclude:
The key difference in terms of the optimal strategy is whether our focus is on keeping the disease contained. If the objective is to buy time, then our analysis favors early and aggressive intervention. This minimizes the overall impact … . In contrast, limiting the cumulative cost of a pandemic that will ultimately run its course argues for aggressive policies later, when they will have the biggest impact on the peak load problem for the health-care system and when they will have the greatest impact on the ultimate number infected”.

The authors conclude by listing some simple economic principles to guide how public policy should proceed when faced with a new but poorly understood pandemic. Those principles include buying time upfront, and using that time wisely to gather information to implement a screen, test, trace and quarantine (STTQ) policy. They suggest that both the “buy-time” and long-term containment strategies will have to be based on an effective STTQ policy.

The approach adopted by Mulligan et. al. of considering the nature of trade-offs and suggesting policy principles is more to my liking. If these authors had used their conventional cost benefit analyses to provide specific recommendations of the kind provided by Layard et. al. I would raise the same concerns about the implied policy context of advising a benevolent dictator, rather than informing a democratic political process.


I have misgivings about the valuation of life in both studies, but have not considered the relative merits of each approach, and have nothing better to offer other than directly considering the economic cost of saving lives under alternative strategies.