Pandemics, economic freedom, and institutional trade-offs

Abstract

We argue that institutions are bundles that involve trade-offs in the government's ability to provide public goods that affect public health. We hypothesize that the institutions underlying economic freedom affect the mix of diseases by reducing diseases of poverty relative to diseases of commerce (those associated with free movement of people, such as smallpox or COVID-19). We focus on smallpox and typhoid fever in the late nineteenth century and early twentieth century in order to build on recent work that make arguments similar to ours, especially the framework Werner Troesken sets forth in The Pox of Liberty. Our evidence shows that economic freedom, in multiple periods of time and settings prior to the eradication of smallpox in the second half of the twentieth century, reduced typhoid mortality but had no effect on smallpox deaths. The implication for COVID-19 is that the trade-off between fighting the pandemic and preserving economic freedom may not be too severe in the short run. However, in the long run, the wealth benefits from economic freedom are likely to be crucial in reducing vulnerability to diseases of commerce primarily from their impact on comorbidities (such as diabetes and heart disease). Thus, economic freedom is on balance good for public health, which suggests that it, while requiring trade-offs, might be the best institutional bundle for dealing with pandemics.

The relationship between economic freedom and growth: Evidence from the Next Eleven (N-11) countries

“…We primarily take the economic freedom index data from the Fraser Institute. This index is widely used in the literature and is considered a suitable measure of the quality of economic institutions (Angulo-Guerrero et al, 2017;Geloso, Hyde, & Murtazashvili, 2022;Lawson & Murphy, 2018;Sharma, 2020;Sharma, Sharma, & Tokas, 2022). This index is based on 44 different variables and has been available annually since 2000.…”

Interpreting the state–citizen nexus in contemporary Nordic legal and social citizenship: the case of divergence in restriction on freedom of movement as a mitigation policy in the COVID-19 pandemic

“…There has been plentiful research on the COVID-19 management, i.e., infection control measures, human rights implications, and policy learning in the Nordic countries (e.g., Brusselaers et al, 2022; Geloso et.al. 2021; Kuhlmann et.al., 2021). Still, there is a lack of interpretivist studies that show how the restrictions on freedom of movement were implemented, and subsequently how policy makers made sense of them in the Nordic countries from a citizenship perspective.…”

How does economic freedom influence public health? Evidence from U.S. cities

“…Troesken (2015), using evidence from U.S. economic history, finds that liberalized markets reduced the ability of governments at the state and local levels to make disease‐reducing improvements in public health. However, Geloso et al (2021) argue that it is important to conceptually distinguish diseases of commerce from diseases of poverty in investigating the link between public health and economic freedom. Diseases of commerce are those which are highly contagious and hard to contain, such as COVID‐19; diseases of poverty are those which can be eradicated through investments in public goods, such as malaria, which is caused by mosquitoes, or typhoid fever, which is caused by contaminated food and water.…”