Does Governance Quality Matter for the Selection of Policy Stringency to Fight COVID-19?

Abstract

Independent of different national conditions, an indisputable fact is that the worldwide governments should play a role in fighting the ongoing COVID-19. To make clear the determinants of government response to tackle COVID-19, I investigate the impact of governance quality. To do so, I newly create an overall governance index based on six dimensions of Worldwide Governance Indicators (WGI) from the World Bank to proxy governance quality. I regress the overall governance index with controls on the stringency index from the Oxford COVID-19 Government Response Tracker database. Using pooled and panel data models with individual and time fixed effects, I find that the relationship between governance quality and policy stringency for 339 days across 163 countries is significantly nonmonotonic. Countries with middle governance quality select a high level of policy stringency in contrast to those with high and low governance quality. I also find that policy stringency significantly increases when daily new cases increase. The findings highlight the role of governance quality in deciding the stringency level of public health policies.