The fight against COVID-19 is a conundrum replete with knowns, known unknowns and unknown unknowns — as Donald Rumsfeld might have said — but policymakers don’t have the luxury of waiting for greater certainty and have to make choices here and now.
Some of the choices are reviewed in our analysis published online by the Centre for Independent Studies this week, Policies against Covid-19: Reflections on the way in and the way out.
We conclude that ongoing or on-off reliance on heavy-handed lockdowns and shutdowns is unsustainably costly to jobs and living standards. It also produces downsides for other health outcomes, so the net impact on health over time is questionable. Such policies deliver declining benefits, but rising costs, as shuttered business are driven past the point of no return.
Australia’s COVID objectives are now unclear. Having more than ‘flattened the curve’ of infections by mid-April below intensive care capacities that have been almost tripled, at least some state governments seem to have adopted an implicit objective of eliminating COVID — and this option is now being canvassed more openly. But even if this could be achieved at all, it would be at an unsustainable economic and social cost.
The policies that worked best to reduce Australian infections to manageable levels were external border controls and quarantining of arrivals from overseas from early February, increasingly broadly and firmly applied through March. But as the situation in Victoria demonstrates, this policy has to be rigorously administered with no slip-ups.
With transmission from abroad shut down, keeping domestic transmission manageably low requires effective quarantine of the domestically-infected and isolation of their contacts. Contact tracing has to become speedier and interactive with testing to isolate new infections quickly.
Support for sensible social distancing has to be strengthened, relying on well-informed self-interest rather than heavy-handed proscription of business activity and customer restrictions. Providing growing evidence on the benefits of social distancing and the character of ‘superspreader’ events harnesses individuals’ self-interest and businesses’ entrepreneurship to sustain low-cost behaviour change and improve personal risk management.
This approach still involves costs. But they are lower relative to the benefits — and more sustainable than a continuation or return to the high-cost, low-benefit policies of business shut-downs and domestic lock-ins.
Robert Carling is a Senior Fellow at the Centre for Independent Studies and a former IMF and federal and state Treasury economist and Terrence O’Brien is a retired public servant who has worked for some 40 years in the Commonwealth Treasury, Office of National Assessments, Productivity Commission and at the OECD and World Bank. They are joint authors of the CIS paper Policies against Covid-19: Reflections on the way in and the way out.