Health vs. Wealth: A Cross-country Analysis of Managerial Effectiveness of the COVID-19

The COVID-19 pandemic has meant great sorrow for the whole world, mainly in health and economic terms. As a result, countries have had to balance both dimensions in search of better performance to overcome this crisis in the best way. In this area, this study, which considers a sample of 150 countries, uses conditional effectiveness models with directional distance functions, both for good (wealth) and bad output (death), to evaluate the dimension in which, economic or health, countries have been more effective as a result of their strategy to combat the pandemic. It also evaluates managerial effectiveness in the joint achievement of minimizing negative health effects and maximizing economic outcomes and relates the two findings. Finally, it uses inequality, governance, and cultural variables to examine the explanatory factors for both managerial effectiveness and the health and economic emphasis of its strategy. The results show that countries with the best managerial effectiveness are those that have balanced both objectives in a fully efficient way, followed by countries with an emphasis on economic orientation. The analysis of the second stage shows that the emphasis on one or the other objective is basically explained by the governance capabilities of each country, while managerial effectiveness is a more complex phenomenon that responds to the extent to which a country had, at the beginning of the crisis, an economy with a low unemployment rate that made the success of the containment measures possible, a government with governance capabilities in place that made it possible to implement urgent measures without inefficiencies, and finally, a culture of low indulgence in which the population was willing to abide by the rules that restricted its activities. In this sense, OECD member countries on average perform better than non-member countries, although this superior performance is not exclusive to this group of countries.