Does the
German "lockdown"[1]
endanger millions of children around the world? Tübingen's Mayor Boris Palmer
(Greens) had provoked at the end of April: "The shutdown, as we operate
it, tries to prolong the lives of very old, seriously ill people in the rich countries
and costs the lives of a much larger number of children in poor
countries".
Is this
true?
As lively
as the general outrage about Palmer's thesis was, the connection "lockdown
here, dead children there" prima facie cannot be dismissed. After all,
Germany is an important part of the globalised economy, closely interwoven in
world trade and an important donor nation. And that child mortality continues
to be a major problem for the international community of states can be seen,
for example, in the 17 Sustainable Development Goals (SDGs). The SDGs are
political objectives of the United Nations (UN), which are intended to ensure
sustainable development worldwide at the economic, social and ecological level.
And in particular goal 3.2 - the reduction of global infant mortality to a
maximum of 2.5% of all newborns five years after birth by 2030 - was already
far from the target set before the Covid pandemic[2],
well before the target came into force in 2016.
But a
closer search for clues proves (without reference to the dubious morality of
his claim): Palmer's thesis is wrong, and in several dimensions.
1. Palmer refers to a new
UN paper from April of this year. However, the authors of the paper do not
present any empirical evidence and also note themselves that this will only be
possible later. In addition, the assumptions made in the study about the link
between Covid-19 and pandemic-induced excess mortality of children in poor
countries are limited to three impact channels, which are also quite plausible:
increased susceptibility to morbid virus infections, overburdening of local
health care systems[3],
and jeopardizing the UN Agenda 2030 with its 17 goals for sustainable
development (SDGs). But: The UN document does not mention the lockdown, it is
even recommended (on page 15)!
2. Neither Palmer nor the UN study
explicitly mention the so-called poverty
elasticity in developing countries as a function of the growth of the rich
countries[4].
The sequence of effects would be indirect: the stringency of the lockdown
reduces GDP in the rich countries, on which GDP growth in the poor countries
depends[5].
In the poor countries, the elasticity of poverty in turn determines child
mortality, at least below a certain income threshold. However, the poverty
elasticity of growth in developing countries depends even more tightly on the
inequality of income and wealth there. If Palmer had read the recent study by
the prominent African economist Augustin Fosu[6],
he ought to have known that.
3. Lockdowns to contain the spread of
the virus have immediate and dramatic effects on daily economic activity. The
impact on GDP will depend on how long the lockdowns last and how stringent they
are. By way of illustration, a two to three-month crisis with a five-week
national "peak austerity" that reduces GDP by 20% per day would
result in a 7% to 8% decline in quarterly GDP, Fitch
rating agency recently estimated. However, lockdowns and changing consumer
habits are not easy to separate: Sweden, for example, is also experiencing a
dramatic slump despite liberal Covid policies. Economists at the University of Copenhagen have
found that lockdowns have had little impact on consumer habits and that the
real damper on buying activity is fear of the corona virus itself.
4. What is the prevention paradox for public health corresponds to the Global
Public Good in the interdependent world economy (Quah, 2020)[7]:
a preventive measure that has a high benefit for the population and communities
often brings little to the individual and vice versa. Historical evidence from
the 1918 Spanish flu, analyzed by the Federal Reserve Bank of New York[8],
shows that those US cities that continued to experience higher employment
growth in manufacturing after that date also had lower mortality rates due to
the epidemic. Importantly, they introduced tighter public health interventions
in the form of physical distancing,
quarantine and lockdown. Strict
preventive measures have a high health benefit for the population as a whole,
but harm individual interests. Therefore, a loud minority rebels against public
health measures which, paradoxically, are acceptable in their own interests.
The search
for clues thus reveals that Boris Palmer has quoted the UN study incorrectly,
misjudging important causal relationships between our prevention measures and
child mortality in the poorest countries and ignoring the prevention paradox.
Palmer was wrong in his provocation, not only morally. After all, in the
pandemic, strict prevention measures are ultimately the least harmful way for
the economy, in rich countries and elsewhere.
*Article published in German on 25. May @Makronom: https://makronom.de/boris-palmer-kostet-der-lockdown-kinder-in-aermeren-laendern-das-leben-36045
[1] Mind you, the
term "lockdown" has not applied to Germany in the corona crisis so
far. Germany does not have a lockdown, but contact restrictions and school
closures. The Blavatnik
School Covid Stringency Index, a
composite of 13 individual indicators (e.g. curfews, stops of public transport,
closures of restaurants, schools and stadiums) has always been well below the
levels of the top stringent Italy, Spain and France.
[2] Max Roser (2019), Child mortality: achieving the global goal for 2030 would be a
huge achievement – but we are currently far away, Ourworldindata, Oxford U, 23.
April.
[3] Simulations by the Johns Hopkins Bloomberg School of Public
Health have confirmed the importance of the state of health systems for
child mortality in poor countries. Another major determinant is
malnutrition. Cf. The
Lancet, May 12, 2020.
[4] The growth elasticity of
poverty (GEP) is the percentage reduction in the poverty rate (PR) associated
with a percentage change in mean (per capita) income (y): GEP = - (d%PR/d%y).
[5] Note that the poorest
countries' dependence on China for growth has exceeded their dependence on OECD
countries for the past two decades. Cf. Chris Garroway et al. (2012), „The Renminbi and Poor‐country Growth”, The World Economy, Vol. 35.3., S. 273-294.
[6] Augustin K. Fosu (2017), “Growth, inequality, and poverty
reduction in developing countries: Recent global evidence”, Research in Economics, Vol. 17.2, S. 306-336.
[8] Sergio Correia et al. (2020),
“Fight the Pandemic, Save the
Economy: Lessons from the 1918 Flu,” Federal Reserve Bank of New
York Liberty Street Economics, 27. March.
