Optimal lockdown policy during the election period

Abstract

This study theoretically examines to what extent a perspective of political election affects optimal lockdown policy at the outbreak of an epidemic. We employ the SIR-macro model in which the incumbent government aims at optimizing social welfare in the periods before polling day to maximize its election result. As a novelty, the substantial uncertainty with regard to the true characteristics of the epidemic faced by the economic agents is taken into account. The results reveal that the optimal lockdown policy crucially depends on the time to the polling day. If it is not longer than several months, the government tends to introduce immediate and more severe restrictions compared to the no-election case. On the other hand, if the election day is later, the optimal policy is to delay launching containment measures. Interestingly, it is difficult to assess which strategy is better in terms of lives saved. While postponing the reaction may result in a significant rise in casualties, an immediate and strict lockdown may also be inefficient in restraining the epidemic.