Industry or civil society? Role of institutions in COVID-19 crisis management

Oindrila Dey () and Debalina Chakravarty ()
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Oindrila Dey: Indian Institute of Foreign Trade, Kolkata Campus
Debalina Chakravarty: Indian Institute of Technology Dharwad

International Review of Economics, 2024, vol. 71, issue 3, No 9, 597-614

Abstract: Abstract India is suffering from the devastating impacts of COVID-19, raising health, economic and social challenges. The industrial sector, along with civil society, took remarkable initiative to manage the crisis. In this paper, we explore the condition necessary for motivating an industrial entity to adopt institutional role in ensuring the well-being of their employees and indirect beneficiaries, balancing the operational goals with social best practices, which may yield a mutually beneficial outcome through a game-theoretic framework. Using a dynamic game model, we find that the sub-game perfect Nash equilibrium outcome is to provide relief during crisis by industrial sector and civil societies when the authoritative power of the industry over the society is sufficiently large. Integration of the civil societies with the industrial sector relief measures would lead to enhancement of the overall welfare of the society. These results are supported by a case study of a power sector organization in the state of West Bengal, India where the industrial entity has successfully maintained a fine balance of controlling the spread of the disease and a stable production process. The institutional initiative in terms of integration of the civil society with industrial entity is also exemplary in contributing to crisis management.

Keywords: Industrial sector; COVID-19; Authoritative power; Civil society; Social welfare; Relief work (search for similar items in EconPapers)
JEL-codes: A13 C71 L29 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s12232-024-00454-x

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