A case for legislation on phased Lock downs and Re-openings during pandemics

As I write on this topic on the 19th of June, the India we know has moved from the ICU to the ward with Unlock 1.0 on a drip by its side. While one eye of the centre is trying to balance the narrative with china the other eye seems to be fixed on the COVID-19 pandemic and managing the repercussions of a not so successful lockdown. Obviously, the limited state capacity is being pulled in two different direction in managing these two extremes.

The lockdown has brought forward the states inadequacy in dealing with such extreme shocks and it is evident that India needs a well thought through policy in dealing with pandemics in the future. The duration of the lockdown and the effectiveness of it is something to be critically reflected on by the policy makers while formulating a policy for the future. In this short essay, I argue for the need of a legislation for phased lockdown’s and re-openings in the event of a pandemic. I believe the policy should be timebound and “adaptive” (Walker, Rahman, & Cave, 2001) to cope with uncertainties and accommodate the rapid changes and disruption the pandemic causes.

But first, taking a step back and answering the most important question “Is there a need for a legislature on phased lock downs and re-openings?”.

The biggest issue we had with COVID-19 was its novelty. And, as is often case with novel events we had no defined leading economic indicators and in this case health indicators in place, to warn us about the impending danger and subsequent consequences. Moreover, as the human psyche is, we were plagued with optimism bias and “planning fallacy” (Kahneman, 2011) at all levels of the state ( Kerala was an exception as state agents were “primed” (Thaler & Sunstein, 2008) for something like COVID as a result of the experience they had with Nipah virus outbreak). The imperfect information surrounding COVID and the externalities associated makes a strong case for state intervention. In fact, with a vaccine still far away and the very possibility of resurgence of the virus (as in Beijing this week (Beijing’s new outbreak is a reminder to the world that coronavirus can return at anytime, 2020)), it is imperative for the state to take a nuanced and evidence based approach for dealing with the ongoing effects of the pandemic and possible resurgence.

Let us look at some of the major problems that the pandemic and the subsequent lockdown caused:

1. Information asymmetry, deficit & legitimacy: The emergence of pandemic and the subsequent lockdown lead to lot of confusion due to information asymmetry. The confusion (e.g. usage of masks) was augmented by the existence of all sorts of misinformation, disinformation & malinformation (Wardle & Derakhshan, 2017).

2. Externalities: The pandemic caused negative externalities. “The nature of transmission via person-to-person proximity creates various “externalities” — individuals’ decisions to interact do not fully incorporate the costs imposed on others. In general, people with the disease (symptomatic or not) will have too many infection-causing contacts, and those without the disease will not have the proper incentive to avoid getting it.” (Murphy, Mulligan, & Topel, 2020)

3. Markets and State had limited capacity in handling the pandemic — For starters, the abysmal primary healthcare system exacerbated the state capacity in tacking the pandemic. As eloquently concluded by Kapur in her paper “The functional primary health care units have seen a declining trend on an all-India level.” (Kapur, 2020)

4. Incentives — The right incentives are still not in place. For instance, the testing rates per capita is one of the lowest in the world.

5. Regulations: The regulations brought in to curb the pandemic had many “unintended consequences” (Kelkar & Shah, 2019). For instance, the spike in price of sanitisers, the hoarding of PPEs, the migrant exodus etc.

6. A Demand Collapse — The lockdown has resulted in a demand collapse and a skewed demand in some sectors. The stimulus packages are designed to increase demand and boost sentiment. But this will take time.

7. A Supply Collapse — Lockdown had disrupted supply chains. Typically, the supply side takes time to meet the demand. But, getting back demand to pre-covid times seems a bit far away (Not quite all there: The 90% economy that lockdowns will leave behind, 2020). The supply side must look-out at this tension.

8. Exit Strategy — Like the specifics were missing when the lockdown started, the specifics are missing with the unlock strategies. For instance, should people maintain a specific distance between them in public spaces, should metros be run with a curtailed capacity? — would a violation be punitive? Surely, an absence of many such clear guidelines is going to cause significant problems.

A well thought out policy with clear incentives, triggers and leading indicators will help in articulating a robust legislature to tackle COVID-19 lockdowns and reopening’s. The alternate which is the laissez-faire approach is an option that will have an extremely high cost. This alternative we simply cannot take

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