A Literature Review of Pandemics and Development: the Long-Term Perspective

Abstract

Pandemics have been a long-standing object of study by economists, albeit with declining interest, that is until COVID-19 arrived. We review current knowledge on the pandemics' effects on long-term economic development, spanning economic and historical debates. We show that all economic inputs are potentially affected. Pandemics reduce the workforce and human capital, have mixed effects on investment and savings, but potentially positive consequences for innovation and knowledge development, depending on accompanying institutional change. In the absence of an innovative response supporting income redistribution, pandemics tend to increase income inequalities, worsening poverty traps and highlighting the distributional issues built into insurance-based health insurance systems. We find that the effects of pandemics are asymmetric over time, in space, and among sectors and households. Therefore, we suggest that the research focus on the theoretical plausibility and empirical significance of specific mechanisms should be complemented by metaanalytic efforts aimed at reconstructing the resulting complexity. Finally, we suggest that policymakers prioritize the development of organizational learning and innovative capabilities, focusing on the ability to adapt to emergencies rather than developing rigid protocols or mimicking solutions developed and implemented in different contexts.

Universal health coverage evolution, ongoing trend, and future challenge: A conceptual and historical policy review

“…Its death volume was more than 35 million. More than 6 million people died recently as a result of the COVID-19 pandemic ( 81 , 82 ). When universal health coverage evolved, the most important goal was financial coverage in complex situations.…”

The effect of increasing health disaster risk and public spending on economy conditions: a DSGE perspective

“…Since land and physical capital stock are not affected in the short-run, a decrease in labor supply leads to a decrease in the gross domestic product (GDP) (Acemoglu and Johnson, 2007); therefore, pandemics decrease physical capital accumulation and economic growth by reducing labor supply and GDP. In this situation, a long-term negative loop is created between GDP and physical capital (Callegari and Feder, 2022). If this event is not accompanied by policies such as increasing the supply of public goods, it will cause a sharp decrease in the GDP (World Health Organization, 2009).…”

On the economic impacts of COVID‐19: A text mining literature analysis

“…Brodeur, Gray, Islam, and Bhuiyan ( 2021 ), through a manual selection of studies, made a literature review analyzing dimensions like measurement of virus spread, social distancing actions, macroeconomic issues, and socioeconomic consequences of the current pandemic. Callegari and Feder ( 2022 ) conducted a literature review on the long‐term economic effects of different pandemics on development, including COVID‐19, underlining effects on innovation, human and physical capital, using Preferred Reporting Items for Systematic Reviews and Meta‐Analyses (PRISMA) method. Studies addressing literature reviews about other disruptive events with severe effects on economy like terrorism were performed by Krajňák ( 2021 ) and Akça and Ela ( 2017 ) or natural disasters by Botzen, Deschenes, and Sanders ( 2019 ).…”