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Political Economy of Crisis Response

Author

Listed:
  • Arda Gitmez

    (University of Chicago - Harris School of Public Policy)

  • Konstantine Sonin

    (University of Chicago - Harris School of Public Policy)

  • Austin L. Wright

    (University of Chicago - Harris School of Public Policy)

Abstract

We offer a model in which heterogeneous agents make individual decisions with negative external effects such as the extent of social distancing during pandemics. Because of the externality, the agents have different individual and political preferences over the policy response. Personally, they might prefer a low-level response, yet would vote for a higher one because it deters the others - even if simultaneously decreasing their personal benefits. The effect is even more pronounced in information acquisition: agents would want one level of slant in the information they base their actions on and a different level of slant in public announcements. The model accounts for numerous empirical regularities of the public response to COVID-19.

Suggested Citation

  • Arda Gitmez & Konstantine Sonin & Austin L. Wright, 2020. "Political Economy of Crisis Response," Working Papers 2020-68, Becker Friedman Institute for Research In Economics.
    • Handle: RePEc:bfi:wpaper:2020-68
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    Citations

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    Cited by:

    1. Wright, Austin L. & Sonin, Konstantin & Driscoll, Jesse & Wilson, Jarnickae, 2020. "Poverty and economic dislocation reduce compliance with COVID-19 shelter-in-place protocols," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 544-554.
    2. Gianmarco Daniele & Andrea F.M. Martinangeli & Francesco Passarelli & Willem Sas & Lisa Windsteiger, 2023. "Externalities and the Erosion of Trust," CESifo Working Paper Series 10474, CESifo.
    3. Liu, Lisa Yao & Lu, Shirley, 2021. "Information Exposure and Corporate Citizenship," Working Papers 312, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    4. Francis de Véricourt & Huseyin Gurkan & Shouqiang Wang, 2021. "Informing the Public About a Pandemic," Management Science, INFORMS, vol. 67(10), pages 6350-6357, October.
    5. Stankov, Petar, 2024. "Will voters polarize over pandemic restrictions? Theory and evidence from COVID-19," Economic Modelling, Elsevier, vol. 136(C).
    6. Chernozhukov, Victor & Kasahara, Hiroyuki & Schrimpf, Paul, 2021. "Causal impact of masks, policies, behavior on early covid-19 pandemic in the U.S," Journal of Econometrics, Elsevier, vol. 220(1), pages 23-62.
    7. Guido Merzoni & Federico Trombetta, 2021. "A Note on Asymmetric Policies: Pandering and State-specific Costs of Mismatch in Political Agency," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis2102, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).
    8. Milosh, Maria & Painter, Marcus & Sonin, Konstantin & Van Dijcke, David & Wright, Austin L., 2021. "Unmasking partisanship: Polarization undermines public response to collective risk," Journal of Public Economics, Elsevier, vol. 204(C).
    9. Adam Brzezinski & Valentin Kecht & David Dijcke & Austin L. Wright, 2021. "Science skepticism reduced compliance with COVID-19 shelter-in-place policies in the United States," Nature Human Behaviour, Nature, vol. 5(11), pages 1519-1527, November.
    10. Lisa Yao Liu & Shirley Lu, 2023. "The Effect of Firms' Information Exposure on Safeguarding Employee Health: Evidence from COVID‐19," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 61(3), pages 891-933, June.
    11. Marcella Alsan & Luca Braghieri & Sarah Eichmeyer & Minjeong Joyce Kim & Stefanie Stantcheva & David Y. Yang, 2023. "Civil Liberties in Times of Crisis," American Economic Journal: Applied Economics, American Economic Association, vol. 15(4), pages 389-421, October.
    12. Etienne Farvaque & Hira Iqbal & Nicolas Ooghe, 2020. "Health politics? Determinants of US states’ reactions to COVID-19," Post-Print hal-03128875, HAL.
    13. Maxim Ananyev & Michael Poyker & Yuan Tian, 2021. "The safest time to fly: pandemic response in the era of Fox News," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(3), pages 775-802, July.
    14. Painter, Marcus & Qiu, Tian, 2021. "Political beliefs affect compliance with government mandates," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 688-701.

    More about this item

    Keywords

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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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