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A Case for Social Distancing in Developing Countries

Ammar Rashid
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Ammar Rashid: Senior Researcher, Health Policy Think Tank Heartfile

No 2020:8, PIDE-Working Papers from Pakistan Institute of Development Economics

Abstract: The following paper is a response to the paper ‘The Benefits and Costs of Social Distancing in Rich and Poor Countries’ by Zachary Barnett-Howell and Mushfiq Mobarak (April 2020) of Yale, who use a Value of Statistical Lives (VSL) analysis to argue that the epidemiological and economic benefits of saving lives via social distancing in the context of the COVID-19 pandemic are ‘much smaller in poorer countries’ than in rich countries. This paper argues that Barnet-Howell and Mobarak’s paper does not amount to a credible cost-benefit analysis of social distancing in the present context as: (a) It mischaracterizes the goal of social distancing as a permanent imposition until a vaccine is developed rather than an epidemiological measure aiming to bring the reproduction number below 1 ; (b) It underestimates the mortality risks in developing countries owing to a lack of consideration of lower healthcare capacity, greater incidence of existing infectious diseases, higher levels of air pollution and multi-generational households; (c) It relies on flawed methodology that calculates the value of statistical lives for developing countries in the context of a pandemic from a past, unrepresentative sample of studies consisting of valuations of willingness to pay (WTP) to reduce linear workplace risk - rather than non-linear infectious disease risk - in developed countries; (d) It uses questionable assumptions of an absence or impossibility of any government intervention that could reduce the risk-income trade-off for workers from low-income countries; (e) It fails to assess the costs of potential COVID19 contagion including the long-term damage to public health, health worker mortality, and supply chains and food production disruption, among others, critical to conduct an objective cost-benefit analysis on the merits of social distancing. It is argued in response that that social distancing is not a negotiable measure exclusively applicable to rich countries but is demonstrably necessary to avert the potentially catastrophic mortality, morbidity and economic consequences of COVID-19 contagion. Cost-benefit analyses for the pandemic must assess the risks and costs specific to the current context rather than abstract estimates of VSL based on past, linear risks. While social distancing exerts economic costs, evidence shows that mitigating those costs through targeted stimulus measures in developing countries for time-bound periods is both possible and necessary for long-term economic revival. Further, instead of blanket claims about the inapplicability of disease suppression measures in developing countries, economic policy will need to work in tandem with epidemiological and public health indicators like the reproduction number (R), rate of growth of infections, hospital, bed and ICU capacity and testing statistics, while reviewing a range of fiscal and monetary options to assess how economic costs can be averted to minimize loss of both life and livelihoods through appropriate income support, food distribution, health and employment interventions.

Keywords: Covid-19; Social Distancing; Value of Statistical Lives; VSL; Cost-benefit Analysis; Developing Countries (search for similar items in EconPapers)
JEL-codes: I10 I18 O10 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2020
New Economics Papers: this item is included in nep-hea
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