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Efficiency of government policy during the COVID-19 pandemic

Delis, Manthos D. and Iosifidi, Maria and Tasiou, Menelaos (2021): Efficiency of government policy during the COVID-19 pandemic.

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Abstract

Using data envelopment analysis and stochastic frontier models, we introduce a new country-month index of efficiency of government policy in dealing with the COVID-19 pandemic. Our indices cover the period May 2020 to March 2021 for 81 countries. Our framework assumes that governments impose stringent policies with the ultimate goal of saving lives. We use policies listed in the Oxford COVID-19 Containment and Health Index as government policy input and a deaths-based measure as the output. Importantly, we estimate our output to account for country-month variations in the quality of death reporting. Based on their average efficiency, the top 5 countries are Taiwan, Japan, Estonia, Finland and New Zealand. We also examine the correlates of our new indices and find that important and positive ones are institutions, democratic principles, political stability, high public spending in health, female participation in the workplace, and economic equality. Within the efficient jurisdictions, the most efficient ones are those with cultural characteristics of low power distance and high patience. The new index and its correlates produce several avenues for future research.

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