The Economic and Institutional Determinants of COVID-19 Mortality

Ivanaj, Ernest and Oukhallou, Youssef (2020): The Economic and Institutional Determinants of COVID-19 Mortality.

Abstract

This paper examines the potential influence of economic and institutional factors on the death toll of the novel coronavirus pandemic. In this endeavour, we estimate a variety of functions using the Poisson Pseudo-Maximum Likelihood method (PPML) with cross-sectional data from 107 countries. Economic factors are represented alternatively through GDP per capita and unemployment, while the multiple aspects of institutional quality are encompassed through different indices. Our results suggest that economic variables do not directly affect the death rates of COVID-19 while institutional variables such as regulatory quality, government effectiveness and corruption control have a significant and consistent downward correlation with COVID-19 mortality across countries. These results support the claim that investing in better institutions helps mitigate the deadliness of infectious diseases.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economy; quality of institutions; COVID-19 mortality
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C21 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions; I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy ; Regulation ; Public Health

References

Atkeson, A. (2020), ‘What will be the economic impact of covid-19 in the US? rough estimates of disease scenarios’, NBER Working Paper No. 26867, National Bureau of Economic Research, March

Barro, R.J., Ursúa, J.F., and Weng, J. (2020), ‘The coronavirus and the great influenza pandemic: Lessons from the “Spanish flu” for the coronavirus’ potential effects on mortality and economic activity’, NBER Working paper No. 26866, National Bureau of Economic Research, March

Brenner, M. H. (1971), ‘Economic changes and heart disease mortality’, American Journal of Public Health, 61(3), PP. 606-611

Cheng, M.P., Papenburg, J., Desjardins, M., Kanjilal, S., Quach, C., Libman, M., Dittrich, S., and Yansouni, C.P. (2020), ‘Diagnostic testing for severe acute respiratory syndrome-related coronavirus 2’, Annals of Internal Medicine, Vol. 172 (11), June, PP. 726-735

Cohen, C., and Werker, E. D. (2008), ‘The Political Economy of “Natural” Disasters’, Journal of Conflict Resolution, 52(6), PP. 795–819

Eichenbaum, M. S., Rebelo, S., Trabandt, M. (2020), ‘The macroeconomics of epidemics’, NBER Working Paper No. 26882, National Bureau of Economic Research, April

Escaleras, M., Anbarci, N., and Register, C.A., (2007) ‘Public sector corruption and major earthquakes: A potentially deadly interaction’, Public Choice, 132(1), PP. 209-230

Giri, A.K., and Rana, D. R. (2020), ‘Charting the challenges behind the testing of COVID-19 in developing countries: Nepal as a case study’, Biosafety and Health, Vol. 2, Elsevier, May, PP. 53-56

Hai, W., Zhao, Z., Wang, J., and Hou, Z. (2004), ‘The Short-Term Impact of SARS on the Chinese Economy’, Asian Economic Papers, 3(1), PP. 57-61

Kahn, M.E. (2005), ‘The Death Toll from Natural Disasters: The Role of Income, Geography, and Institutions’, The Review of Economics and Statistics, 87(2), MIT Press, PP. 271-284, May

Kaufmann, D., Kraay, A., and Mastruzzi, M. (2010), ‘The Worldwide Governance Indicators: Methodology and analytical issues’, Policy Research Working Paper No. 5430, World Bank, September

Kellenberg, D. K., Mobarak, A. M. (2008), ‘Does rising income increase or decrease damage risk from natural disasters?’, Journal of Urban Economics, 63(3), PP. 788-802

Keogh‐Brown, M.R., Wren-Lewis, S., and Edmunds, W.J. (2010), ‘The possible macroeconomic impact on the UK of an influenza pandemic’, Health Economics, 19(11), PP. 1345-1360

Mckibbin, W. J., and Roshen, F. (2020). The global macroeconomic impacts of COVID-19: Seven scenarios’, Centre for Economic Policy Research (CEPR), COVID Economics, Issue 10, April

Ramelli, S., and Wagner, A.F. (2020), ‘Feverish Stock Price Reactions to Covid-19’, CEPR Discussion Paper No. DP14511, March

Raschky, P. A. (2008), ‘Institutions and the losses from natural disasters’, Natural hazards and earth system sciences, 8(4), pp. 627-634

Toya, H., and Skidmore, M. (2007), ‘Economic development and the impacts of natural disasters’, Economics Letters, 94(1), PP. 20-25

Transparency International (2017), ‘Corruption perceptions index 2017: Technical methodology note’, Berlin, January