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.

1. Introduction

This chapter analyzes some challenges national governments worldwide face when implementing policies to control COVID-19. These government policies affected several freedom-related dimensions in all countries asymmetrically. The analysis of these government policies may provide some clues about national differences in the success of controlling the pandemic. Like Dempere [1], we categorize these policies based on economic freedom dimensions related to national regulatory efficiency and market openness, including business, labor, monetary, trade, investment, financial, and press freedoms. The analysis also includes institutional and social perspectives comprising some factors studied by Dempere [2] like the national political system, the impact of fake news, and the health institutional framework. The chapter will also expose the most relevant institutional deficiencies that hindered some governments’ effectiveness at controlling the pandemic.

2. COVID-19 and business freedom restrictions

The notion that only democratic regimes can provide superior business freedom than less democratic ones is fallacious. Like Dempere [1, 2], we used the classification of the 2021 Economist’s Intelligence Unit’s [3] democracy index (full democracy, flawed democracy, hybrid regime, and authoritarian regime) and calculated the average index of business freedom compiled by the Heritage Foundation [4] for 161 countries from 2014 to 2021. This index quantifies the government restrictions on domestic business activities. Figure 1 below shows the top ten authoritarian regimes with the highest average degree of business freedom and the democracies with lower business freedom.

Figure 1.

2014–2021 average of Heritage Foundation’s index of business freedom per country.

The figure shows that citizens of these ten so-called “authoritarian” regimes like the UAE, Bahrain, Saudi Arabia, Qatar, etcetera, have enjoyed superior average business freedom from 2014 to 2021 compared to 108 countries, including 30 democracies like Spain, Luxemburg, India, Brazil, Philippines, etcetera, during the same period. Dempere [1] finds that countries enjoying a high degree of the Heritage Foundation’s (HF’s) business freedom index imposed the softest government restriction and experienced higher averages of COVID-19 cases and deaths per million. He explains that nations with a tradition of business freedom experienced significant challenges when trying to impose business restrictions to control the pandemic. The resistance of business owners to accept business and social limitations like lockdowns and curfews magnified the negative impact of the outbreak. Indeed, Spiegel and Tookes [5] find that implementing government policies related to the mandatory use of masks, restaurant and bar closures, gym closures, and other high-risk business closures have predictive power on new COVID-19 deaths.

Business actors’ resistance to adopting the government restrictions was primarily explained by the economic costs associated with such business constraints. Indeed, Fairlie [6] studies the pandemic impact on US small business owners and finds that small business activities decreased by 22% in the two months between February and April 2020, or the closure of 3.3 million small businesses. The impact was more severe among minorities, including African-Americans (41% drop), Latins (32% drop), Asians (26% drop), and female business owners (25% drop). Government restrictions also had a disproportionately negative impact in some industry sectors, while others experienced an economic benefit from such constraints. Indeed, Fairlie and Foseen [7] analyze data from the California Department of Tax and Fee Administration and find that some industry sectors were negatively affected by lockdowns (accommodations experienced sales losses of 91%). At the same time, other industry sectors flourished (online sales grew 180%).

3. COVID-19 and labor freedom restrictions

The perception that people living in democratic regimes enjoy higher labor freedom than less democratic nations is incorrect. We classified countries again like in Figure 1 and determined the average HF’s index of labor freedom for 161 countries from 2014 to 2021. This index estimates the degree to which national governments allow labor to work and move freely without unnecessary restrictions except those intended to protect and maintain the freedom itself. Figure 2 below shows the top ten less democratic countries’ averages of labor freedom and the democracies with lower values of this freedom.

Figure 2.

2014–2021 average of Heritage Foundation’s index of labor freedom per country.

The figure above shows that people living in autocracies like the UAE, Bahrain, Belarus, Qatar, Saudi Arabia, etcetera enjoy more labor freedom than 117 countries, including 43 democracies like Belgium, Spain, Italy, Germany, France, Netherlands, etcetera, over the same period. Dempere [1] finds a significant relationship between the national labor freedom and the daily average of COVID-19 cases per million. He suggests that regimes with low labor freedom experienced high unemployment rates requiring state intervention and controls. These actions minimize the negative impact of the pandemic on labor markets but also reduce domestic labor freedom.

Indeed, Bell and Blanchflower [8] study the pandemic effects on the labor market and find that a third of the Canadian and US workers lost about 50% of their income due to the COVID-19 crisis, compared with 25% in the UK and 45% in China. Similarly, Chi-Wei et al. [9] find a significant association between COVID-19 cases and unemployment in Italy, Germany, and the UK. Equally, Mekonnen and Kassegn [10] find that the working hour loss during 2020 was more than 10% in Eritrea, Cape Verde, and Uganda. They inform that pandemic-driven lockdowns caused a 10.6% decrease in Ethiopia’s agricultural output and 19.8% in Ghana. They also find increases in food insecurity of 6–15% in Nigeria, 38% in Kenya, and 44% in Uganda.

According to the Organization for Economic Co-operation and Development [11], many regimes adopted policies to safeguard existing jobs, like job retention arrangements and administrative suspensions of dismissals. They inform that nations with comprehensive restrictive labor regulations and resources experienced the lowest increases in unemployment rates during the early stages of the pandemic. Alternatively, those countries that experienced high unemployment rates due to low government interference in the labor market (high labor freedom) faced substantial challenges in encouraging people to stay at home. Otherwise, regimes with strict regulations aimed at protecting the domestic labor market (low labor freedom) enjoyed the enhanced public acceptance of government restrictions to control the pandemic.

4. COVID-19 and monetary freedom restrictions

The view that only democratic countries have better monetary freedom than less democratic ones is misleading. We classified nations again like in Figures 1 and 2 and determined the average HF’s index of monetary freedom for 161 countries from 2014 to 2021. This index measures domestic inflation and government policies that may result in biased prices of goods and services. Figure 3 below shows the top ten authoritarian regimes’ averages of monetary freedom and the democracies with lower averages of monetary freedom.

Figure 3.

2014–2021 average of Heritage Foundation’s index of monetary freedom per country.

The figure shows that people living in less democratic regimes like Jordan, Burkina Faso, UAE, Mali, Niger, etcetera, have enjoyed greater monetary freedom than 105 countries, including 31 democracies like the United States, Greece, France, Canada, Norway, etcetera, during the same period. Dempere [1] finds a significant negative relationship between a country’s degree of monetary freedom and the pandemic response time, but a positive association between monetary freedom and the daily average of COVID-19 cases per million. He explains that during the first wave of the outbreak, nations worldwide endured shortages and price spikes of many goods due to frozen manufacture, crops rotting due to lack of harvesting, global supply-chain interruptions, etcetera. As a result, the World Health Organization [12] requested businesses and governments to coordinate efforts to minimize the increased demand for products due to panic purchases, speculation, and hoarding, especially for medical materials. Those regimes with high monetary freedom before the pandemic experienced significant challenges when enforcing regulations to control market distortions created by the COVID-19 crisis. Those nations with low monetary freedom could implement controls more quickly and effectively, resulting in faster pandemic response time and lower coronavirus cases. Such regulation intended to reduce the harmful impact of the pandemic on the domestic market of goods and services also reduced the national monetary freedom.

Indeed, Ahn [13] finds that South Korea imposed a fixed price on 80% of the medical masks sold to the public to ensure the public health and reduce the pandemic spread. Similarly, Chakraborti and Gavin [14] study the impact of current anti-gouging laws in several US states banning price increments during the COVID-19 crisis. Using the number of Google searches as a proxy metric for depletion of sensitive goods like toilet paper and hand sanitizer, they find a positive relationship between states prohibiting price gouging and shortages of these goods. Likewise, Islam et al. [15] study the buying behaviors during the COVIDID-19 crisis in the U.S., China, India, and Pakistan. The perceived limited quantity and time scarcity dimensions increased impulsive and obsessive consumer buying in these countries. Equally, Hall et al. [16] find evidence of stockpiling consumer behaviors during the pandemic from increased spending in some consumer goods categories.

5. COVID-19 and trade freedom restrictions

The perception that only democratic nations have superior trade freedom than no democratic ones is deceptive. We again classified governments like in Figures 1–3 and found the average HF’s trade freedom index for 161 countries from 2014 to 2021. This metric includes tariff and non-tariff barriers to the international trade of goods and services. Figure 4 below shows the top ten authoritarian regimes’ averages of trade freedom and the democracies with lower averages of trade freedom.

Figure 4.

2014–2021 average of Heritage Foundation’s index of trade freedom per country.

The figure shows that citizens of less democratic regimes like Eswatini, the UAE, Qatar, Oman, Bahrain, etcetera, have experienced superior trade freedom than 86 nations, including 18 democracies like South Korea, Philippines, South Africa, Brazil, Argentina, etcetera, over the same period. Dempere [1] finds a significant association between trade freedom and the daily average of COVID-19 deaths per million. Indeed, the World Trade Organization [17] informs that during the first wave of the pandemic, several nations engaged in trade restrictions to alleviate dangerous food and health materials scarcities. Similarly, Carreño et al. [18] list some countries imposing trade restrictions during the COVID-19 crisis, including Indonesia’s temporary ban on face masks, sanitizers, and some medical equipment, and India banning similar exports, including ventilators and anti-malaria medicines. They also listed Kazakhstan banning all product exports, Serbia banning exports of sunflower oil, Vietnam suspending exports of rice, El Salvador and Honduras banning exports of vegetables temporarily, Kyrgyzstan prohibiting the export of some food products, and Romania banning exports of wheat, corn, rice, and other grains.

In the same way, Hoekman et al. [19] inform of 75 governments, including the US, China, the EU, India, Turkey, and the UK, implementing trade restrictions on medical supplies and medicines during the pandemic. Likewise, Pauwelyn [20] reports 69 governments banning or limiting personal protective equipment, pharmaceuticals, and other medical supplies exports. A landmark incident reported by Willsher et al. [21] was about the US government (emblematic democratic regime) being accused of “modern piracy” after outbidding the German government (another democracy) and diverting a shipment of N95 masks intended for the German police. They informed that Andreas Geisel, the interior minister for Berlin State in 2020, described the incident in the following terms: “This is no way to treat trans-Atlantic partners,” Geisel said. “Even in times of global crisis, there should be no wild west methods” [21]. All the trade restrictions mentioned above were intended to minimize the negative impact of the pandemic on international trade but also diminished domestic trade freedom.

6. COVID-19 and investment freedom restrictions

The erroneous belief that only democracies can provide superior investment freedom to their citizens than no democratic regimes is widespread. We classified nations again as in Figures 1–4 and calculated the average HF’s index of investment freedom for 161 countries from 2014 to 2021. This index assesses the quality and quantity of national limitations to the flow of investment capital, such as limits on access to capital transactions, transfers, payments, and foreign exchange. Figure 5 below shows the top ten authoritarian regimes’ averages of investment freedom and the democracies with lower averages of this freedom.

Figure 5.

2014–2021 average of Heritage Foundation’s index of investment freedom per country.

The figure shows that people in less democratic regimes like Bahrain, Djibouti, Jordan, Oman, Burkina Faso, etcetera, have experienced better investment freedom than 83 nations, including 17 democracies like Philippines, Malaysia, Greece, Brazil, Thailand, etcetera, over the same period. Dempere [1] finds a significant association between investment freedom and the daily average of COVID-19 cases and deaths per million. Equally, Liu et al. [22] verify negative abnormal returns among 21 leading stock market indices after the virus outbreak. Likewise, Chang et al. [23] study data from 20 countries and find that government response to the pandemic significantly positively impacts stock market returns. Similarly, Phan and Paresh [24] analyze the government control of COVID-19 among 25 countries and find that the stock market reacted negatively to news on coronavirus infections and deaths in most countries. They also find a positive stock market reaction in seven countries (Switzerland, Germany, Peru, India, Russia, Israel, the US, and Chile) to the announcement of lockdowns and another positive stock market reaction in nine countries (Peru, South Korea, Italy, Chile, Spain, Japan, Russia, Israel, and Poland) to the announcement of some measures of government stimulus.

Another significant impact of the COVID-19 crisis on capital markets worldwide was the result of national monetary policies implemented by central banks. Indeed, Fischer [25] compares the government economic interventions during the pandemic and finds that most central banks in developed nations could minimize the impact of COVID-19 through central banks unprecedented interventions in terms of scope, speed, and magnitude of asset purchase and emergency lending programs. Milstein and Wessel [26] list the US Federal Reserve (FED) responses to minimize the economic impact of the pandemic, including the FED’s Primary Market Corporate Credit Facility and the Secondary Market Corporate Credit Facility aimed to buy directly new and existing corporate bonds and provide loans to corporations. They also report about the FED’s Commercial Paper Funding Facility, allowing the FED to buy corporate commercial papers for up 3 months as a short-term lending tool for corporations. Similarly, Fischer [25] informs about the Bank of England’s (BoE’s) Term Funding Scheme program to reduce the bank borrowing costs for small and medium enterprises. He also reports the BoE’s COVID Corporate Financing Facility intended to buy commercial papers from large companies and the BoE’s quantitative easing monetary policy to allow the purchase of government and corporate bonds. He also informs about the expansion of the European Central Bank’s Asset Purchase Program and the new Pandemic Emergency Purchase Program to buy national, regional, and local government bonds, corporate bonds, and asset-backed securities, including commercial paper of non-financial corporations. These monetary policies implemented by central banks reduced the pandemic’s adverse effect on national capital markets and decreased domestic investment freedom.

7. COVID-19 and financial freedom restrictions

The belief that people living in democratic regimes can enjoy superior financial freedom is inaccurate. We classified countries again like in Figures 1–5 and determined the average HF’s index of financial freedom for 161 countries from 2014 to 2021. This index evaluates each country’s banking efficiency and independence from government influence and interference in the financial sector. Figure 6 below shows the top ten authoritarian regimes’ averages of financial freedom and the democracies with lower values of this freedom.

Figure 6.

2014–2021 average of Heritage Foundation’s index of financial freedom per country.

The figure shows that those living in less democratic regimes like Bahrain, Jordan, Oman, Qatar, the UAE, etcetera enjoy superior financial freedom than 87 countries, including 19 democracies like Costa Rica, Argentina, Greece, India, Uruguay, etcetera, over the same period. Dempere [1] finds a significant positive relationship between financial freedom and the daily average of cases and fatalities per million but a negative and significant association with the outbreak response time.

Indeed, Long et al. [27] study the monetary policies’ impact on 38 countries and find that central bank interventions had an initial positive influence on reducing the pandemic-caused inflation but limited effect on minimizing the impact of COVID-19 on unemployment rates. Alternatively, Fernández et al. [28] anticipated the current spike in inflation exacerbated by the war in Ukraine when studying the long-term effects of central banks’ stimulus policies aimed at minimizing the economic impact of the pandemic through low-interest rates and purchases of large quantities of public and private debt. In the same way, Milstein and Wessel [26] inform about the FED monetary policies to minimize the impact of the pandemic on the banking sector, including the reduction of the Federal funds rate by 1.5% and the Primary Dealer Credit Facility to provide low rate short-term loans to 24 large financial institutions. They also report the FED’s Money Market Mutual Fund Liquidity Facility to give the banks with loans collateralized by prime money market funds and its international swap lines to provide US dollars to foreign central banks in exchange for foreign currencies and charged interest on the swaps. They also inform of the FED’s reduced rate (0.25%) loans to banks from its discount window and temporary relaxed regulatory bank liquidity and capital requirements to increase bank lending during the outbreak.

Similarly, Fischer [25] informs that the BoE reduced its Bank Rate to 0.1% in response to the pandemic, which constituted a historic all-time low record. He also reports a further reduction of the ECB deposit rate to a −0.5% in response to COVID-19 and the expansion of its targeted long-term refinancing operations to provide banks with low-rate & long-term loans as an incentive to promote bank lending operations. He finds that most major central banks temporarily relaxed regulatory restrictions on bank lending practices during 2020. These monetary policies adopted by many central banks were intended to minimize the harmful effects of the pandemic on the domestic banking sector but also decreased national financial freedom.

8. Is press freedom a blessing or a course during pandemic times?

The notion that only democratic regimes can provide superior press freedom is correct. No country without press freedom is compatible with any classification of democracy, so no figure was included in this category. However, significant evidence suggests that press freedom may be a disadvantage for most democracies trying to control the pandemic.

Dempere [29] finds that the daily average of coronavirus infections and deaths per million has a positive and significant relationship with a country’s information and communication technology (ICT) readiness. His results are consistent with the challenges that fake news posed to governments worldwide during the early stages of the pandemic. He suggests that regimes with superior ICT reediness experienced significant challenges from pandemic fake news and deception in social media. The World Health Organization [30] has warned that spreading COVID-19 misinformation through media and similar digital platforms constitutes a worse threat to public health than the coronavirus itself.

In the same way, Arafat et al. [31] suggest that media is critical in explaining panic buying since public perceptions drive this collective behavior. They indicate that reporting fake news to appropriate government authorities will help to prevent panic buying. Similarly, Arafat et al. [32] analyze content media reports during the COVID-19 pandemic and find that 46% of news highlighted scarce products and around 82% informed drivers of panic buying. Equally, about 80% covered the impact of panic purchases, and approximately 25.7% highlighted rumors explaining some panic consumer behavior. They conclude that the media has significant responsibility when reporting panic buying.

The strategies to mitigate the effects of fake news during the pandemic by less democratic regimes constitute a sharp contrast with most democracies. Indeed, Arab News [33] informs about the fines and jail time awaiting people spreading pandemic-related fake news in the Middle East. Specifically, the news outlet reports that Egypt would impose imprisonment of up to 3 years and fines of up to $1200, and Saudi Arabia would enforce up to 5 years of jail time and fines up to $800,000. Equally, Oman would levy up to 3 years of jail term and fines up to $7700; the UAE would impose up to 3 years of imprisonment and fines up to $816,000. Correspondingly, Jordan, Kuwait, and Lebanon would take the necessary legal actions (including possible arrests) against people causing panic by spreading COVID-19 misinformation.

The spread of fake news in some democracies started with their leaders. Indeed, the most prominent was former President Donald Trump’s recommendation to his health officials to study the injection of bleach into the human body to fight the coronavirus [34] or his alleged daily doses of hydroxychloroquine to prevent COVID-19 [35]. Similarly, Brazilian president Jair Bolsonaro characterized the pandemic as a “little flu” and abused his constitutional powers to distort clinical protocols, data disclosure, and vaccine procurements [36]. He also recommended hydroxychloroquine to treat COVID-19 patients [36]. Likewise, Indian Prime Minister Neranda Modi declared at a global forum in January 2021 that India “saved humanity... by containing corona effectively.” [36]. On April 17, 2021, Modi held a massive political gathering with thousands of participants in West Bengal, a state where Modi was trying to win local elections and where no pandemic restrictions had been imposed. That same day India reported 234,692 new COVID-19 cases, more than 20 times the daily figures from late January to early February 2021 [37]. Four weeks later, Modi’s government allowed the massive Kumbh Mela pilgrimage, where millions of pilgrims gathered to bathe in the Ganges River throughout April. From January 1, 2020, to December 2021, India (the largest democracy on Earth) reported 481,000 COVID-19 deaths, but the World Health Organization estimates this number at about ten times as many [38]. In the same way, Mexican President Andrés Manuel López Obrador resisted imposing social restrictions in the early stages of the pandemic and continued holding political rallies nationwide, frequently refusing to wear a mask [36]. A comprehensive list of leaders mishandling the coronavirus crisis cannot be provided due to the chapter’s length restrictions.

Burki [39] studies the online anti-vaccine movement during the COVID-19 crisis and informs that the British Centre for Countering Digital Hate (CCDH) has reported “...31 million people follow anti-vaccine groups on Facebook, with 17 million people subscribing to similar accounts on YouTube. The CCDH calculated that the anti-vaccine movement could realize US$1 billion in annual revenues for social media firms. As much as $989 million could accrue to Facebook and Instagram alone, largely from advertising targeting the 38·7 million followers of anti-vaccine accounts. Huge sums indeed, but it is worth noting that, in 2019, Facebook generated revenue of $70·7 billion...” [39].

McDonald et al. [40] identified 34 Facebook pages considered super-spreaders of false information about COVID-19, with more than 100,000 likes each and 14,139,288 likes total. They mention the WorldTruth.TV channel with 1,683,036 Facebook page likes and posts claiming that the COVID-19 vaccine would use “microchips” used for a “global tracking system” [40] and that COVID-19 vaccines would “alter” human DNA. Another example was The Truth About Cancer cannel, with 1,140,726 Facebook page likes and posts stating that social restrictions to control COVID-19 were “obedience training” [40] and that Bill Gates will use the COVID-19 vaccine to monitor people. Another example was the EnVolve channel, with 684,972 Facebook page likes and posts informing that Dr. Anthony Fauci, the director of the U.S. National Institute of Allergy and Infectious Diseases, was personally profiting from a COVID-19 vaccine. Again, a comprehensive list of social media accounts spreading fake news cannot be provided due to the chapter’s length restrictions.

Like in “Ripley’s Believe It or Not!” (the American franchise founded by Robert Ripley reporting bizarre facts or items so strange and unusual that readers would mistrust such claims), the United Nations Office on Drugs and Crime [41] informs about the Joint Declaration on Freedom of Expression and “Fake News,” Disinformation and Propaganda of 2017 in the following terms: “...Standards on Disinformation and Propaganda.

a. General prohibitions on the dissemination of information based on vague and ambiguous ideas, including ‘false news’ or ‘non-objective information,’ are incompatible with international standards for restrictions on freedom of expression, as set out in paragraph 1(a), and should be abolished....” [41].

Not surprisingly, the 2021 Nobel Peace laureate Maria Ressa said that “…social media companies have a responsibility to fight disinformation and its corrosive effects on public discourse and democracy…” and that “…‘If you’re working in tech, I’m talking to you,’ said Ressa, addressing dignitaries in Oslo’s cavernous city hall. ‘How can you have election integrity if you don’t have integrity of facts?’…” [42].

Equally and not surprisingly, Fischer [43] informs about The Edelman Trust Barometer’s 2022 global survey of 35,000 respondents across 28 countries, showing a collapse of trust in democracies. The survey also found that most respondents considered journalists (67%), government leaders (66%), and business executives (63%) as the social actors who intentionally mislead people with false or wrong information. Similarly, Mark [44] informs that the same survey ranks institutions in Germany (down 7 to 46%), Australia (−6 to 53%), the Netherlands (−6 to 57%), South Korea (−5 to 42%), and the US (−5 to 43%) as the top losers of public trust during 2021. Alternatively, the survey found that public confidence in institutions in China (+11 to 83%), the United Arab Emirates (+9 to 76%), and Thailand (+5 to 66%) and the top winners of public trust for the same year.

9. COVID-19 and democracy

The growing literature on COVID-19 & democracy can be classified as those articles with evidence of inferior performance for democratic systems compared with less democratic ones versus those with evidence supporting otherwise. Indeed, Dempere [2] identifies some government success metrics in managing the first wave of COVID-19. He finds that democracies implemented the softest social restrictions and experienced the highest daily averages of cases & deaths per million and mortality rates. He also finds that democratic nations demonstrated the quickest outbreak response time and the most prominent daily averages of tests per thousand. Similarly, Engler et al. [45] study the impact of institutional protection of democratic principles among 34 European countries and find that countries with strong regulatory protection of individual freedoms faced substantial challenges in adopting restrictive policies. Likewise, Cheibub et al. [46] find that democracies react slowly to the pandemic by implementing restrictive measures and abrogating some civil rights. They concluded that governments faced conflicting alternatives between preventing deaths with a significant economic cost (long-term) and protecting livelihoods (short-term). The notion of state capacity could not explain their heterogeneous results since most of their metrics for quality of governance did not have explanatory power over the democratic delay measured by daily or cumulative deaths.

In the same way, Cepaluni et al. [47] find that democracies experienced higher COVID-19 deaths per capita and quicker than less democratic countries. They concluded that democracies were less effective at controlling the initial stages of the pandemic. Equally, Narita and Sudo [48] find that democratic nations suffered higher COVID-related deaths and higher Gross Domestic Product (GDP) loss. Herren et al. [49] find that the democracy index, GDP per capita, and country-specific COVID-19 trend have explanatory power on people’s acceptance of government restrictions for pandemic control. Trein [50] finds that countries with less democratic institutional traditions faced minor challenges when enforcing coronavirus-related limitations than nations with more democratic institutional legacy. Huang et al. [51] find that most democratic regimes experienced a higher incidence of COVID-19. Valev [52] finds a positive relationship between democracy and COVID-19 cases & fatalities per million using a sample of 45 countries. Mazzucchelli et al. [53] also find that the democracy index and its components have a significant and positive association with the pandemic fatality rates. Ashraf [54] finds a weak association between democracy and pandemic deaths in a sample of 120 countries but a significant relationship between tourist arrivals and COVID-19 fatalities.

Alternatively, some studies have found a negative association between COVID-19 & democracy by using non-official datasets. Indeed, Esarey [55] analyzes Karlinsky and Kobak’s [56] dataset in a not peer-reviewed article and finds a negative bivariate correlation between excess mortality and democracy. In another not peer-reviewed paper, Badman et al. [57] study the effectiveness of democracies at controlling the pandemic and find that less democratic regimes are weakly associated with higher excess mortality rates. In the same way, Jain et al. [58] find that democracies have a significant negative relationship with excess fatalities during the first 18 months of the COVID-19 crisis.

Knutsen and Kolvani [59] argue that less democratic regimes have strong motivations to engage in propaganda based on distorted facts to mask domestic problems that may negatively affect the local public perception of government effectiveness. They explain that autocracies have excellent opportunities to misrepresent inconvenient data to foreign audiences. As a result, these regimes are more prone to underreport actual COVID-19-related statistics than democracies. They use excess mortality data from the Economist [60] and find that democratic government have higher officially reported fatality rates than less democratic nations. Still, this difference is due to underreporting in autocracies. They also find that high-capacity democracies have lower fatality rates than autocracies.

There is a flaw in the logic behind the assumption that excess mortality is better than official statistics to measure the real impact of the COVID-19 crisis. One fundamental factor calculating excess mortality is using national historic trends to estimate the expected mortality rate without the effects of the pandemic. Based on past trends, the fatalities above the predicted death toll determine such excess mortality. This methodology implies that autocracies must have reported accurate and reliable data before the COVID-19 crisis and that the same regimes must have provided misleading information only after the beginning of the outbreak in 2020. However, such misleading information must be only about the total COVID-19 deaths since this methodology requires considering the total national deaths as reliable data for all countries and periods. No logical explanation exists to support this rationale. A researcher must assume that all the data from autocracies is unreliable or otherwise. Nevertheless, considering the autocracies’ COVID-related data are reliable before 2020 and inconsistent after the pandemic’s beginning makes no logical sense. Similarly, assuming that autocracies’ coronavirus deaths are false values while their total deaths for the same period are actual values has no rational explanation and produces biased results.

Excess mortality is a measurable phenomenon that cannot be denied. This anomaly in the national statistics can be interpreted in many ways. The health profile of people in democratic regimes may have contributed to the lower deaths caused by COVID-19 in less democratic countries. Indeed, Dempere [1] analyzes the national health quality index (NHQI), a primary health care system metric, and finds that countries with the lowest average daily cases and fatalities per million also exhibited the highest NHQIs. He explains this seemingly spurious result by classifying the countries based on their NHQIs and finding that nations with the highest NHQIs are wealthy democracies measured by their GDP per capita. People in these countries usually experience health problems that are less frequent in developing countries, like a high percentage of 65 or older, a high incidence of cardiovascular illness, cancer, diabetes, or chronic respiratory disease, and a high proportion of the urban population. All these factors predict the average coronavirus daily deaths per million [61, 62, 63, 64, 65].

Alternatively, the collapse of deficient health care systems in developing countries may also explain the non-COVID-19-related deaths component of the excess mortality. Indeed, while coronavirus patients crowded hospitals and clinics looking for medical treatment, the rest of the population with other medical conditions could not receive medical attention exacerbating the non-pandemic mortality rates compared with historical records. In addition, people needing medical attention may have been reluctant to go to health care centers crowded with COVID patients and face the risk of infection. Indeed, Taylor [66] informs that on March 17, 2020, nine out of twenty-six Brazilian states experienced an 80% occupancy rate of their covid-19 intensive care beds, and 15 states experienced an even higher occupancy rate of 90%. Equally, López et al. [67] inform that the Venezuelan healthcare system collapsed to the ever-increasing number of COVID-19 patients needing hospitalization, forcing desperate people to opt for self-medication.

10. COVID-19 and the time-inconsistency problem

The outstanding performance of central banks in addressing the economic impact of the pandemic described before is due to their relative insulation from political pressures and the resulting capacity to manage the time inconsistency problem. The time-inconsistency problem arises when achieving short-term goals jeopardize attaining long-term strategic objectives. The term is commonly used in public administration to refer to the challenges facing monetary policymakers when pursuing short-term unemployment reductions at the expense of high long-term inflation rates [68, 69, 70]. Policymakers are inclined to implement expansionary monetary policies to increase economic growth and employment in the short run. This policy predisposition may happen before electoral processes when political support is usually associated with voters’ current rather than future wellbeing. However, such expansionary policies may result in high inflation rates in the long term, which may reduce economic growth and employment.

The time-inconsistency problem may affect policymakers in any national government functional area. In the case of the COVID-19 crisis, the time-inconsistency problem may describe how and why policymakers engage in right or wrong decisions when trying to control the pandemic. At the beginning of the outbreak, human fear was the main driving force behind the public support for restrictive government policies. Indeed, Bol et al. [71] find that lockdowns increased political support, government trust, and satisfaction with democracy using a questionnaire between March 2 and April 2, 2020, in 15 European countries. Similarly, Schraff [72] applies a representative Dutch household survey in March 2020 and finds that increased COVID-19 statistics lead to increased political trust explained by the notion of an emotionally driven anxiety effect.

Restrictive government policies go against freedom-related democratic values, so public support for such policies is associated with a lack of support for a political system unable to restrict social freedoms and control the pandemic. Indeed, Marbach et al. [73] find that lockdown policies increase authoritarian values and support for autocracy using survey data collected from 27,317 respondents between March and May 2020 in the U.S. and four European countries. Similarly, Amat et al. [74] study survey data collected from March 20 to 28, 2020, and find Spanish public support for a technocratic and authoritarian government style capable of restricting individual freedoms.

The initial public support for restrictive measures to control COVID-19 had a heterogeneous impact among nations in terms of intensity and duration. Such initial support for vigorous government intervention to prevent the pandemic may have explained some electoral outcomes during 2020, the most notorious the US election. Indeed, Baccini et al. [75] study the influence of COVID-19 on the 2020 US presidential election and find that coronavirus cases and deaths had a significant negative relationship with former US President Donald Trump’s vote share. Their analysis suggests that Trump would probably have won re-election if pandemic cases had been 5 percent lower.

Knutsen and Kolvani [59] suggest that the lack of electoral accountability provides autocracies more flexibility to adopt restrictive measures. This rationale is simple but incomplete. Although electoral accountability is a powerful political motivation for effective control of the pandemic in democracies, this premise assumes that people would support social restrictions for as long as needed to control the outbreak. Unfortunately, this premise proved wrong in most democracies due to the devastating impact of COVID-related stressors on a personal level.

The literature on COVID-19’s psychological impact can explain the waning support for pandemic-related restrictions. The studies include analyses on the resulting domestic violence derived from long periods of lockdown-induced proximity joint with economic uncertainty and crisis-related instability [76]. In addition, during the pandemic, some articles verified high levels of anxiety, depression, and fear [77, 78, 79]. Similarly, many studies find a severely adverse psychological impact, including post-traumatic stress symptoms, confusion, anger [80, 81], and high rates of suicide [82, 83, 84]. Some studies focused on the negative physiological impact of COVID-19 patients’ feelings of guilt and shame [85]. Once the 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.

In other words, after the initial public support for restrictive measures disappeared, many government authorities find themselves confronting a time-inconsistency problem. Graichen [86] illustrates this COVID-19 time-inconsistency problem in his comparative analysis of Germany’s first and second waves of the pandemic. The poor performance of the German government in managing the second wave of the outbreak was due to the changing priorities of German politicians. The short-term economic recovery represented by keeping businesses open took precedence over strict social distance policies and mobility restrictions to reduce cases and deaths over the long term. The second wage challenged many democratic systems to persuade people to follow the recommended scientific path, as scientific arguments were less relevant in the second wave than in the first.

Similarly, Sager [87] studies the Swiss response to the first COVID-19 wave-based expert medical advice from the Federal Office of Public Health. He finds that during the lockdown period, the Swiss political debate about the country’s timing for reopening switched from analyzing scientific health-related evidence to an economic-centered discussion. Such arguments were driven by economic actors with vested interests and special access to the Swiss political elites, particularly the restaurant and tourism umbrella organizations: GastroSuisse and HotellerieSuisse, which were severely hit by the COVID-19 crisis. The outcome was an earlier than expected restaurant reopening and a reversal in the customer contact tracing program, which might have explained the devastating Swiss second COVID-19 wave.

The lack of realization about the time inconsistency problem as a critical democracies’ structural problem reduces the chances of urgent restructurings in these regimes. Indeed, Golberg [88] clearly expressed the need for reforms when analyzing the interaction of US President Joe Biden with the Chinese leader Xi Jinping where he explained that: “... democracy doesn’t work anymore. Among other things, Xi said, democracy requires consensus, and mustering a consensus takes too long in a fast-moving world. Only autocracies are equipped to meet the extraordinary challenges of modern times...We Americans often treat our liberal democracy as a national religion, and routinely assert, as if no evidence were needed, that it is the most moral, just, effective and admirable system on Earth. But few would deny that there’s been some disturbing evidence to the contrary in recent years. The Jan. 6 riot, of course, was a low point. Then there was the chaotic, inefficient, politicized response to the pandemic... Another reason is that in a democracy, elected officials have no incentive to support policies that require pain and sacrifice today in exchange for future gain... In most cases, courageous politicians who supported such policies would be voted out of office...” [88].

Like the Chinese leader Xi Jinping, Knutsen and Kolvani [59] also recognize that democracies have a more complex institutional and regulatory framework that hinders the quick passage and implementation of restraining pandemic policies and regulations. The critical impact of time when adopting coronavirus mitigating strategies places democracies at a disadvantage compared with less democratic regimes. Autocratic regimes could react faster to the pandemic because they did not need to invest any time to reach a consensus or get input from many institutional actors with veto power on government decisions.

Hodge [89] suggests that Russian President Vladimir Putin is another autocratic leader aware of democracies’ time-inconsistency problems. Putin has engaged in a long-term war with Ukraine, hoping that international fatigue will force the international community to push Ukrainian President Volodymyr Zelensky’s government to make concessions to Russia. The US faced this same time-inconsistency problem when fighting the Afghanistan war. The saying “You have the watches, but we have the time” attributed to a captured Taliban fighter reflects the Taliban’s awareness that they were operating on different political horizons and timelines. Like the US war in Vietnam, the Taliban only needed to outlast, but not defeat, the technologically superior US military since they were confident that public support for the war in a democracy would wane over time. Like the fading initial support for social restrictions during the COVID-19 crisis, Putin is waiting for the same outcome as the impact of inflation and economic recession will switch the public support for the war in Ukraine in most western democracies. Another tragic example of democracies without politically insulated institutions capable of avoiding the time-inconsistency problem in critical decision-making processes.

11. Conclusions

The fallacious argument that any criticism of western democracies in their current state of historical development implies automatic support for their authoritarian counterparts is prevalent even in academic forums. The deficiencies of democratic systems must be solved to avoid the threat to their existence represented by disenfranchised voters.

Democracies should struggle for an institutional and regulatory framework that insulates policymakers from political pressures when the time-inconsistency problem can result in biased decision-making processes. Independent central banks constitute an example of effective institutions engaging in quick decision-making processes that allow policymakers to pursue long-term strategic goals without significant pressure from short-term political priorities.

National government institutions with political insulation like that enjoyed by many central banks should constitute an effective national crisis management system for western democracies. Such institutions should design multidisciplinary-based policies with input from previous domestic crisis experiences and foreign ones. Indeed, Yang et al. [90] find that the exemplary case of South Korea at implementing effective and innovative initial measures to control the first wave of COVID-19 overshadows the valuable lessons painfully learned from its efforts to control the Middle East respiratory syndrome (MERS) in 2015. The most valuable knowledge from the Korean MERS failure experience was the lack of government informational transparency and openness to the public.

The radical view of considering any government policy or practice from less democratic countries inferior is not based on science but on ideology. The assumption that the current dimensions of democracies and autocracies are the only alternatives for government regimes is an absurd dichotomy. Unfortunately, such a view is prevalent in many organizations and directly affects decision-making processes. Indeed, Repucci and Slipowitz [91] suggest on behalf of the Freedom House that autocratic leaders have succeeded in shifting global democratic incentives to place at risk the premise that democracy is “the only viable path to prosperity and security” [91] while promoting more authoritarian political regimes. Blaming others is an easy way to justify that in 2021 more democracies suffered deterioration compared to those experiencing progress, expanding a trend of 16 consecutive years of democratic decline. Unfortunately, the need for urgent institutional reforms is rarely suggested as a possible explanation for this democratic decline worldwide.

Alternatively, several less democratic regimes have evolved quickly by implementing reforms that provide their citizens with levels of freedom (e.g., business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom) far superior to many democracies. Most democracies assume that democracy in its current form constitutes the best political system, so the need for reforms is not considered an urgent priority. Unfortunately, this lack of immediate reforms may explain the significant decay of democracy worldwide.