Abstract. Using cross-country variation in policy responses to COVID as a quasi-natural experiment, we provide novel insights on the effect of uncertainty on rational public choice. We find that governments acted as optimizing agents during the recent pandemic, trading off healthcare and economic costs by setting more responsive COVID protocols in countries with lower levels of trust and productivity. However, we find evidence for this optimizing behavior only after the introduction of COVID vaccines. The results suggest that there is a threshold of uncertainty beyond which rational public choice is undermined.
Coauthor. Valerio Potì (UC Dublin).
Manuscript. You can download the paper here.
Presentations. The International Panel Data Conference at the University of Orléans, and the International Conference on Empirical Economics at Pennsylvania State University.