Why the Pandemic Played Out Differently Across the Developed World

Commentary

Perhaps the most noteworthy feature of the pandemic is that there was no uniform pattern of impact across advanced countries. The pandemic unfolded differently in each developed country, and governments that spent more did not as a rule more successfully contain the virus or better maintain their economies.

From the first reports of a pneumonia of unknown origin in Wuhan, China, in December 2019, the COVID-19 pandemic grew and spread around the world, with massive impacts on health, mortality rates, economies, and government budgets. Currently, the global tally is nearly 165 million cases and 3.5 million deaths. With the spread of new variants and differential rates of vaccination around the world, the effects of the pandemic will continue to reverberate worldwide.

However, we can already learn from this pandemic to help shape responses to future outbreaks.

Many people, including policymakers, view the pandemic as unprecedented or surprising, but only because the technological and economic progress of the 21st century—and resulting high living standards—has caused many to lose historical perspective. Plague and pestilence have been part of the human experience since the start of recorded history. Pandemics have happened before and will happen again. Nevertheless, many countries were caught unprepared for COVID-19.

Moreover, the pandemic did not strike everyone simultaneously, and even with additional time, some advanced countries seemed unable to heed warning signs and act quickly to implement proactive measures. Despite our instantaneous 21st-century communication and information dissemination, many countries seemingly had to experience their own pandemic before taking the matter seriously—even countries that experienced past viral outbreaks such as SARS.

As such, the pandemic’s effects were surprisingly severe in developed countries. For example, the International Monetary Fund’s advanced economies, which comprise only 18 percent of all countries, in 2020 accounted for 40 percent of the 30 countries with the highest COVID-19 deaths per million (although the older populations of advanced countries were a key factor in initial death tolls).

In the absence of vaccines or effective treatments, the world’s first year of the pandemic response unfolded more like a medieval plague or the Spanish flu. Control efforts consisted largely of face-masking, quarantines, lockdowns, and physical distancing. In the end, unlike the Black Death, it was not the deaths from COVID-19 per se that devastated economies, but rather the restrictions and stringent measures imposed by government to reduce spread. Lockdowns, quarantines, and travel restrictions disrupted global supply chains and had severe economic impacts on the international travel industry, labour-intensive services, food and accommodation, tourism, and the arts and entertainment sectors. Indeed, a one unit increase in the Oxford Stringency Index, which tracks government policy responses to the pandemic based on data from more than 180 countries, was associated with an approximate percentage point drop in real GDP growth of 0.1 percent.

Moreover, as noted in a new study published by the Fraser Institute, prolonged levels of stringent government restrictions did not significantly reduce COVID-19 case counts or deaths per million. On the plus side, high rates of testing helped control mortality rates, with each additional 100,000 tests per million associated with 21 fewer COVID-19 deaths per million. And again, countries with larger elderly populations experienced higher COVID-19 mortality rates.

Crucially, the number of hospital beds played a key role. Internationally, each additional hospital bed (per 1,000 people) was associated with 31.5 fewer COVID-19 deaths per million. Even among advanced countries, there are substantial variations in bed numbers. In 2020, hospital beds per 1,000 ranged from highs of 13.1 in Japan, 12.2 in South Korea and 8.0 in Germany to lows of 2.5 in Canada and Denmark, 2.4 in Singapore and 2.2 in Sweden.

In the end, though all countries experienced the pandemic, its intensity and severity varied as did the economic impact, and there wasn’t always a direct linear relationship between the intensity of the disease and the economic and fiscal impact. Indeed, countries with governments that spent more did not necessarily experience a better outcome in either maintaining their economies or containing the virus.

Clearly, how each country chose to play the cards they were dealt was an important determinant of the health and economic impacts reported during the pandemic’s first year.

Livio Di Matteo is professor of economics at Lakehead University and senior fellow at the Fraser Institute.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.