Smart thinking, lockdown and Covid-19: Implications for public policy

    Research output: Contribution to journalArticlepeer-review

    1177 Downloads (Pure)

    Abstract

    The response to Covid-19 has been overwhelmingly to lockdown much the world’s economies in order to minimize death rates as well as the immediate negative effects of Covid-19. I argue that such policy is too often de-contextualized as it ignores policy externalities, assumes death rate calculations are appropriately accurate and, as well, assumes focusing on direct Covid-19 effects to maximize human welfare is appropriate. As a result of this approach, current policy can be misdirected, with highly negative effects on human welfare. Moreover, such policies can inadvertently result in not minimizing death rates (incorporating externalities) at all, especially in the long run. Such misdirected and sub-optimal policy is a product of policy makers using inappropriate mental models which are lacking in a number of key areas: the failure to take a more comprehensive macro perspective to address the virus; using bad heuristics or decision-making tools; relatedly not recognizing the differential effects of the virus; and adopting herding strategy (follow-the-leader) when developing policy. Improving the decision-making environment, inclusive of providing more comprehensive governance and improving mental models, could have lockdowns throughout the world thus yielding much higher levels of human welfare.
    Original languageEnglish
    Pages (from-to)23-33
    Number of pages11
    JournalJournal of Behavioral Economics for Policy
    Volume4
    Issue numberCOVID-19 Special Issue
    Publication statusPublished - Jun 2020

    Keywords

    • Covid-19
    • bounded rationality
    • herding
    • poor heuristics
    • lockdown
    • public policy

    Fingerprint

    Dive into the research topics of 'Smart thinking, lockdown and Covid-19: Implications for public policy'. Together they form a unique fingerprint.

    Cite this