Abstract
Throughout the COVID-19 crisis, governments have relied heavily on the advice of epidemiologists and health professionals, while economists maintained a low profile in policymaking. This paper illustrates how economic insights could have helped and would be essential in future pandemics. Its focus is on microeconomics and on the fact that when the set of incentives which someone faces changes, individuals are likely to change their behaviour. Governments have failed to appreciate the importance of incentives throughout the pandemic. For example, test and trace has failed due to a lack of understanding of the incentives in a system of self-isolating. Likewise, to maximise the vaccine uptake, governments could pay everyone who gets vaccinated. Governments have also relied too heavily on opinion polls on lockdown. These have consistently shown strong support for restrictions. But economists prefer to rely on preferences revealed by actions, and not on those stated in surveys. The former show less enthusiasm for lockdown, with regulations being widely evaded. A key part of the economists’ policy tool kit is cost-benefit analysis. Studies published using this, by distinguished economists, uniformly suggest that the costs of lockdown exceed its benefits.
Published Version
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