The Covid-19 Pandemic: A Public Choice View

142 Pages·2023·3.445 MB·English

by  Panagiotis Karadimas

Studies in Public Choice
Panagiotis Karadimas
The Covid-19
Pandemic
A Public Choice View
Studies in Public Choice
Volume 42
Series Editor
Randall G. Holcombe
Department of Economics
Florida State University
Tallahassee, FL, USA
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Panagiotis Karadimas
The Covid-19 Pandemic
A Public Choice View
Panagiotis Karadimas
Athens, Greece
ISSN 0924-4700 ISSN 2731-5258 (electronic)
Studies in Public Choice
ISBN 978-3-031-24966-2 ISBN 978-3-031-24967-9 (eBook)
https://doi.org/10.1007/978-3-031-24967-9
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To my parents and my brother
and
To my regular interlocutors, the incredible
people in Korai square in downtown Athens
Preface
My initial intuition back in March 2020 was that by viewing through rose-tinted
spectacles the pandemic policy responses that were first then implemented could
result in being grossly misguided. As public choice theorists have long argued, poli-
ticians are not exactly the benevolent individuals that care for the common good and
have as their very first priority the public interest, as the public-interest theory sug-
gests. Instead, they simply act as everybody else, i.e., in order to increase their util-
ity. Given these propositions, seeing politicians implementing policies that were
unthinkable until 2019, my intuition was that there must be more than meets the eye,
and the panicked population gave an important clue of was going on: The sweeping
mitigation measures came in response to voters’ demand for action. Possible inac-
tion or even targeted action could have been conceived by the public as ineptitude,
and politicians would have ended up worse off. The public was in a state of mass
hysteria and failed to rationally assess the dangers of the disease and the dangers
induced by the mitigation measures (especially by the lockdowns) and so conceived
the policy responses as life-saving. Thus politicians and bureaucrats maximized
utility at the expense of the majority of the population who ended up worse off due
to the collateral damage inflicted by the measures. This is the central thesis devel-
oped in the book. However, to make a convincing case in favor of the application of
public choice theory, one needs to compare its predictions with the ones made by
public interest theory according to which politicians followed science and acted in
favor of the so-called “common good.” The book, therefore, is confronted with the
task of testing against the empirical record which of these two theories best explains
the pandemic policy responses. The conclusion is that public-interest explanation is
rejected, while public choice theory explains very well the policy responses.
Politicians acted throughout the pandemic not as public-interested agents but as
self-interested ones.
Part of the argument presented here appeared in my paper “Covid-19, Public
Policy and Public Choice Theory” in the fall 2022 issue of the “Independent
Review”. I thus thank the Independent Institute for granting me permission to reuse
material from that paper and especially Figs. 5.1 and 5.2 that here appear in Chap.
5. I am also grateful to Chrysostomos Mantzavinos for many helpful discussions
vii
viii Preface
and to Bryan Caplan for illustrations on the applications of his theory of rational
irrationality. Last but not least, I thank Lorraine Klimowitch, the publishing editor
at Springer, for supporting the project and for the systematic communication we had
throughout the publication process.
Athens, Greece Panagiotis Karadimas
Contents
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Public Interest Explanations vs. Public Choice Explanations . . . . . 1
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2 Viral Mitigation: Weak Theoretical Underpinnings . . . . . . . . . . . . . . 9
2.1 SARS-CoV-2’s IFR Speaks Against the Equal
Vulnerability Thesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 There Is More to Immunity Than Antibodies:
The Case of Pre-existing Immunity . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.3 Is There Such a Thing as Asymptomatic Transmission? . . . . . . . . . 16
2.4 Wishful Thinking Part 1: Zero-Covid Through Lockdowns . . . . . . 18
2.5 Wishful Thinking Part 2: Zero-Covid Through
Mass Vaccination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.6 The Fundamental Problems of Lockdown Mechanism . . . . . . . . . . 27
2.7 Lockdown Failure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.8 Pre-existing Immunity vs. Shutdowns . . . . . . . . . . . . . . . . . . . . . . . 34
2.9 Modeling Drawbacks: Poor Inputs, Poor Outputs . . . . . . . . . . . . . . 35
2.10 Displacement Effect, Lockdowns, and Focused Protection . . . . . . . 44
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3 The World Stampeded: From Mass Hysteria
to Prolonged Mass Hysteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
3.1 Laying Out Mass Hysteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
3.2 Mass Hysteria Intensified and Drew Out . . . . . . . . . . . . . . . . . . . . . 64
3.3 Mass Hysteria and Social Desirability Bias:
Panic Institutionalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4 Tradeoffs and Knock-On Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
4.1 The Wrong Dilemma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
4.2 Estimating Tradeoffs: Established Knowledge
as Guiding Principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ix
x Contents
4.3 School Closures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
4.4 Economic Devastation Part 1: Deep Recession . . . . . . . . . . . . . . . . 81
4.5 Economic Devastation Part 2: Increased Spending
and Inflationary Tolls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
4.6 Isolation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
4.7 Unreasonably (?) High Excess Deaths . . . . . . . . . . . . . . . . . . . . . . . 89
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
5 Public Choice Theory: An Explanation of the Pandemic
Policy Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
5.1 Can Voters Ever Be Public-Interested Agents? . . . . . . . . . . . . . . . . 97
5.2 Voters’ Ideal Point: A Conglomerate of Expected Utilities . . . . . . . 101
5.3 Politicians as Vote Maximizers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5.4 Public Choice Theory Applied to Outliers . . . . . . . . . . . . . . . . . . . . 107
5.5 Not Ill-Informed Politicians: Public Choice
Theory and the Precautionary Principle . . . . . . . . . . . . . . . . . . . . . . 108
5.6 Public Choice Theory and Mass Vaccination . . . . . . . . . . . . . . . . . . 111
5.7 Bootleggers and Baptists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
5.8 Pandemic Responses’ Popularity: Weak and Hard Data . . . . . . . . . 122
5.9 Budget Maximizing Mechanism . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
6 Epilogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
6.1 The Sound Scientific Grounds of Public Choice Theory . . . . . . . . . 133
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134