The Challenges of Assessing Government Economic Restrictions to Control the COVID-19 Pandemic

The Challenges of Assessing Government Economic Restrictions to Control the COVID-19 Pandemic

Abstract: Since the beginning of the COVID-19 crisis, most regimes worldwide adopted restrictive policies intended to minimize the adverse effects of the pandemic but also decreased most liberties enjoyed by their citizens. Such restrictive policies affected several freedom-related dimensions like business, labor, monetary, trade, investment, financial, and press freedoms. The time-inconsistency problem arises when achieving short-term goals jeopardize attaining long-term strategic objectives. In the case of the COVID-19 crisis, the time-inconsistency problem may describe how and why policymakers engage in right and wrong decisions when trying to control the pandemic. Electoral accountability is a powerful political motivation for effectively managing the pandemic in democracies. However, once the initial public support for social restrictions disappeared, the electoral accountability logic worked in the opposite direction: most political leaders perceived that lifting pandemic restrictions early would increase their electoral chances. Democracies should struggle for an institutional and regulatory framework that insolate policymakers from political pressures when the time-inconsistency problem can result in a biased decision-making process. National government institutions with political insulation like that enjoyed by central banks should constitute an effective national crisis management system for western democracies.