Professor Miltos Makris collaborates again with Dr Flavio Toxvaerd summarising the economic approach to contagious diseases for NIESR.
The COVID-19 pandemic emerged as a health crisis, spreading rapidly across the globe in a harrowing reminder of the negative side effects of increased inter-connectedness between nations.
The virus quickly infected all aspects of daily life: disrupted education, working from home and the enforced closure of many businesses in a series of national lockdowns have all damaged the economy, as well as the liberties and wellbeing of society at large.
‘The COVID-19 crisis has upended the lives of many, causing almost 200M global infections to date, over 4M deaths and untold damage to the livelihoods of millions. Although the recent vaccine rollout in some parts of the world offers some room for optimism, the epidemic is still far from defeated and many in the developing world are still at significant risk of infection.’
Almost a year and a half after the first UK lockdown was announced, we are seeing light at the end of the tunnel. Restrictions have greatly eased, the vaccine rollout has been successful in meeting key milestones and the economy is starting its journey towards recovery. However, the effects of the pandemic are sure to be felt for years to come, and the scale of its impact is still not fully known.
This Makris–Toxvaerd collaboration piece written for the National Institute of Economic and Social Research discusses the importance of coordination between public health policy and economic policy.
“Effective COVID-19 policy is not only about public health, but also about economics” reads the headline, aptly describing the need to recognise the economic impact of decisions taken to tackle the pandemic.
It highlights how the government have been largely advised by three main groups, focused on modelling, behaviours, and the economy separately. This is inherently problematic, as the three are intertwined.
The core principles of economics allow us to make rational decisions, and the use of economics to aid in the creation of health and social policy can help us reach a socially optimal outcome.
‘The nature of the crisis, ostensibly one related to public health, has proved to be multi-pronged, with economic and social behaviour, public health policy and economic policy closely intertwined and both reacting to and conditioning the future path of the epidemic.’
The article suggests that “infectious disease epidemiology and public health are closer to the social sciences than to cognate fields such as biology and medical sciences.” This has been seen over the course of the pandemic, with policy led by the compliance (and non-compliance) of the general public in response to measures that have been implemented and eased. Behavioural Economics helps us to understand what incentivises people and how they make decisions; this can help with modelling potential outcomes of new policies.
It is clear that if the UK is to successfully recover from the COVID-19 pandemic in years to come, public health policy needs to work in tandem with Economics in order overcome the challenges previously faced by a multi-pronged approach.
Read the Makris-Toxvaerd piece here.
The policy challenges posed by the epidemic were well articulated by NIESR’s Director Jagjit Chadha in his Review’s Commentary earlier this year.