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Complex externalities, pandemics, and public choice

Author

Listed:
  • Ilia Murtazashvili

    (University of Pittsburgh)

  • Yang Zhou

    (University of North Texas)

Abstract

The conventional wisdom guiding pandemic policy is that the complexity of externalities justifies a centralized government response and suppression of economic freedom. We argue that public choice offers a compelling argument that the opposite is the case: complex global public health crises justify polycentric responses and protection of economic freedom. We show this by considering three distinct themes in the public choice analysis of pandemics. The first theme is that government failures are ubiquitous during pandemics. The second is that polycentric governance institutions are more appropriate than monocentric ones to address pandemic externalities. The third is that while economic freedom may make controlling pandemics more challenging in the short run, in the longer run, economic freedom is what ultimately contributes to a more robust response to pandemics through technological innovation and wealth creation. Together, public choice provides what we call a liberal political economy of pandemics in which polycentricity and economic freedom are appropriate institutions to deal with complex, novel externalities.

Suggested Citation

  • Ilia Murtazashvili & Yang Zhou, 2024. "Complex externalities, pandemics, and public choice," Public Choice, Springer, vol. 201(3), pages 607-622, December.
    • Handle: RePEc:kap:pubcho:v:201:y:2024:i:3:d:10.1007_s11127-023-01104-6
    DOI: 10.1007/s11127-023-01104-6
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    More about this item

    Keywords

    Externality; Polycentricity; Pandemics; Government failure; Economic freedom;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • P00 - Political Economy and Comparative Economic Systems - - General - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative

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