Efficiency of Government Policy during the COVID-19 Pandemic

Abstract

Using frontier models, we introduce country-month indices of efficiency of government policy in dealing with the COVID-19 pandemic. Our indices are in respect of 81 countries and cover the period from May 2020 to November 2021. Our framework assumes that governments impose stringent policies (listed in the Oxford COVID-19 Containment and Health Index) with the single goal of saving lives. Importantly, we estimate our output to account for country- month variations in reporting deaths. The top seven countries are Japan, Estonia, Malawi, Finland, Taiwan, New Zealand, and Iceland. We also find that positive and significant correlates of our new indices ones are institutions, democratic principles, political stability, trust, 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 high patience. The new index and its correlates produce several avenues for future research.

Note: Funding Statement: The authors have received no funding.

Declaration of Interests: The authors have no conflict of interest to disclose.

Keywords: Government efficiency, COVID-19 pandemic, Data envelopment analysis, Stochastic frontiers, Oxford COVID-19 Government Response Tracker, determinants of efficiency