The political economy of state responses to infectious disease

February, 2021

How can public policy best deal with infectious disease? In answering this question, scholarship on the optimal control of infectious disease adopts the model of a benevolent social planner who maximizes social welfare. This approach, which treats the social health planner as a unitary “public health brain” standing outside of society, removes the policymaking process from economic analysis. This paper opens the black box of the social health planner by extending the tools of economics to the policymaking process itself. We explore the nature of the economic problem facing policymakers and the epistemic constraints they face in trying to solve that problem. Additionally, we analyze the incentives facing policymakers in their efforts to address infectious diseases and consider how they affect the design and implementation of public health policy. Finally, we consider how unanticipated system effects emerge due to interventions in complex systems, and how these effects can undermine well‐intentioned efforts to improve human welfare. We illustrate the various dynamics of the political economy of state responses to infectious disease by drawing on a range of examples from the COVID‐19 pandemic.

 

The Unproductive Protective State

February, 2019

Economists model state-provided defense as a value-added, public good. The actual government provision of defense, however, is a “black box” that is rarely analyzed. This chapter contributes to opening this black box by analyzing the U.S. defense budget. We provide an institutional explanation for why scarce public resources are often squandered on defense-related activities. Our framework blends insights from James Buchanan and Elinor Ostrom and models the U.S. defense budget as a “fiscal commons.” We consider the absence of mechanisms to ameliorate overgrazing and, in doing so, emphasize that waste, fraud, and abuse is a system feature of the current system. We also consider the implications for reform.