US FORIEGN POLICY WEEK 1

Todd Sandler*

COVID-19 and Collective Action

https://doi.org/10.1515/peps-2020-0023 Received May 25, 2020; accepted June 14, 2020

Abstract: This conceptual article argues that COVID-19 poses myriad global col- lective action challenges, some of which are easier than others to address. COVID- 19 requires numerous distinct activities – e.g., vaccine development, uncovering treatment practices, imposing quarantines, and disease surveillance. The prog- nosis for effective collective action rests on the underlying aggregator technolo- gies, which indicate how individual contributions determine the amount of a COVID-19 activity that is available for consumption. Best- and better-shot aggre- gators are more apt to promote desired outcomes than weakest- and weaker-link aggregators. The roles for public policy and important actors (e.g., multi- stakeholder partnerships) in fostering collective action are indicated.

Keywords: COVID-19, global public goods, global health, aggregator technologies

1 Introduction

The potential global reach of infectious diseases is illustrated by past pandemics such as the Black Death during the fourteenth century that wiped out a third of the European population (Zacher 1999, p. 266). Just over a century ago, the Spanish flu killed tens of millions during 1918–1920 after World War I had left the global healthcare system in shambles. The latter pandemic touched almost everywhere on Earth with cases reported on Pacific Islands and in the Arctic (Center for Disease Control and Prevention (CDC) 2019). Past pandemics were propelled by enhanced transportation – the spread of the Black Death plague is tied to increased trade over the Silk Road and by sea from Asia to Europe (Zacher 1999), while the Spanish flu is linked to increased trade and immigration during and after World War I. Those past and other pandemics resulted in advancements in sanitation and healthcare practices, including the use of quarantines and social distancing.

*Corresponding author: Todd Sandler, School of Economic, Political & Policy Sciences, University of Texas at Dallas, Richardson, TX, USA, E-mail: [email protected]. https://orcid.org/0000- 0001-9077-5915

Peace Econ. Peace Sci. Pub. Pol. 2020; 26(3): 20200023

As in the case of earlier pandemics, the spread of COVID-19 is facilitated by a large-scale transportation transformation, which took the form of massive inter- national air travel. From December 2019 to June 2020, COVID-19 grew from a cluster of initial cases in Wuhan, China to over 7 million infections and over 400 thousand deaths worldwide. To stem the spread of this opportunistic disease, shelter-in- place orders created a huge recession with around 44 million losing their jobs by early June 2020 in just the United States. Macroeconomic models suggest sizable economic impacts coming from actions to address the COVID-19 pandemic (Cag- giano, Castelnuovo, and Kima 2020; Rasul 2020).

The purpose of this conceptual piece is to highlight essential collective action aspects tied to efforts aimed to mitigate the exigency that this disease poses. COVID-19 presents the global community with multiple collective action chal- lenges through such activities as discovery, surveillance, social distancing, effective quarantines, treatment regimens, vaccine development, anti-viral drug development, and obtaining herd immunity. Some COVID-19-related collective actions are easier than others owing to inherent public good properties and their associated incentives for (in)action. Thus, the recent work on global public goods (GPGs) and global health, in particular, provides relevant insights for this con- ceptual piece (Peinhardt and Sandler 2015; Sonntag 2010).

Global health is an interesting GPG that differs from other GPGs (e.g., pre- serving biodiversity, controlling climate change, and maintaining peace) in terms of activities, publicness considerations, institutional arrangements, and relevant agents. In particular, global health displays a growing influence on world welfare, the need for diverse collective action, the emergence of new agents (e.g., multi- stakeholder partnerships, charitable foundations, and non-governmental orga- nizations (NGOs)), and institution tailoring (Buchholz and Sandler 2020). The perceived augmented influence of global health on world welfare motivated in- creases in foreign assistance going to the health section (te Velde, Morrissey, and Hewitt 2002). As a recent component of global health, COVID-19 encompasses many constituent GPGs that must be addressed separately, each with its own prognosis for success.

2 Background Primer: GPGs and Their Properties

GPGs possess four basic dimensions. First, the benefits or costs from GPGs affect a large swath of the planet, thereby impacting the vast majority of countries. By enlightening people and researchers of its presence, the discovery of COVID-19’s DNA affects countries worldwide given the disease contagion rate. Second, GPGs’ benefits are nonrival so that the conferral of an activity’s benefits on one country

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does not, in the least, preclude other countries from partaking in the activity’s benefits in an undiminished form. Applying an improved treatment regimen for COVID-19 does not diminish the efficacy of the regimen for other patients when administered. Third, a GPG’s benefits are non-excludable if once the good or ac- tivity is provided by one country, the good’s or activity’s benefits are available to all other countries regardless of payment. For instance, obtaining herd immunity is non-excludable to all countries. Herd immunity, which varies by virus, refers to a sufficient portion of the population acquiring antibodies to the disease through immunization or past infection, so that new infections among the non-immunized stay in check and die out. Fourth, the GPG’s aggregator technology denotes how the contributions of individual countries determine the level of the good available for consumption globally. Until Hirshleifer’s (1983) seminal study, the only aggregator technology for public goods was summation for which the sum of contributions fixes the good’s level of available consumption. Now a wide range of aggregators affects GPGs’ consumption levels and their prognosis for collective action (Sandler 1998).

The combination of the second and third publicness properties give rise to alternative types of GPGs with their own prognosis for provision efficiency. For brevity, we consider only three classic combinations. GPGs displaying fully non- rival and non-excludable benefits are purely public and are the most difficult to provide. Nonrivalry means that there are no efficiency grounds for excluding nonpayers owing to zero marginal costs of use, while non-excludability results in free riding due to users saving their income to purchase excludable goods. The discovery of an effective COVID-19 vaccine or treatment regimen possesses non-rival and non-excludable benefits.

An impure GPG corresponds to an unimaginably large combination of the second and third properties of publicness. From a definitional viewpoint, impure GPGs possess partially rival and/or partially excludable benefits. Curbing a viral outbreak is partially rival because attention and actions focused on one virus hotspot can deprive other potential hotspots from health authorities’ vigilance. Partial rivalry with limited or no exclusion can result in overuse if the marginal costs of use or crowding is not monitored and charged accordingly. Our final distinguished class of goods is a club GPG with partially rival benefits but full excludability. The exclusion mechanism allows a congestion-internalizing toll to be charged to finance the shared club good and promote efficiency. The toll collects marginal crowding costs that each unit of utilization imposes on other users (members) (Buchholz and Sandler 2020). The toll mechanism can address taste differences by charging the same toll per unit of utilization. When users or coun- tries reveal a greater preference for the club good, they visit more frequently and, thus, pay more in total tolls. The sharing of hospitals for treating COVID-19 patients

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represents a club good. Prestigious clinics, such as Mayo, offer global reach for their superior expertise and treatment. Internet consultation networks are subject to congestion (partial rivalry) and excludability, thus representing a health-based club GPG.

3 Aggregator Technologies and COVID-19

The varied collective action responses – some more or less promising than others – stem primarily from the diverse aggregator technologies associated with COVID- 19 activities. We consider seven main aggregators and how they relate to essential activities of addressing COVID-19. The summation aggregator has contributing countries’ provision summing to the total supply available for consumption. When summation characterizes an activity, one country’s provision is perfectly substi- tutable for that of another country so that the marginal impact of a unit of provision is independent of which country provides it. A central stockpile of protective equipment or the treatment capacity of the global community abides by a sum- mation aggregator. The same holds for efforts to test the world’s population to ascertain the infection rate, which informs the global community of the spread and threat of COVID-19. Summation aggregators are often associated with undersupply as countries account for the marginal benefits that their efforts conferred on their people but ignore the benefits conferred on the world’s population. That is, a supplying country equates the marginal benefits (MBs) derived by just its own people, rather than the MBs conferred on the world’s population, to the GPG’s marginal costs (MCs) of provision. As a consequence, the true received sum of MBs exceeds the MCs of provision, thereby resulting in undersupply. Thus, there is a need for international cooperation to address shortfalls.

For many global health activities, weakest-link aggregators, where the smallest provision level determines the public good level, are prevalent (Peinhardt and Sandler 2015; Sonntag 2010). Surveillance of the COVID-19 outbreak adheres to a weakest-link aggregator because the least vigilant effort determines the vulnerability of everyone. China’s failure to alert the world initially of the new disease blindsided all countries to the threat and greatly facilitated the global transmission through air travel. The World Health Organization (WHO) serves as a global focal point for surveillance. Additionally, the attainment of global herd immunity is a weakest-link GPG, which can be stymied by one or more countries’ failure to vaccinate its population once a vaccine is available. For instance, polio has not yet been eradicated given failed vaccination programs in Afghanistan, Pakistan, and Nigeria. If countries have similar income and taste, little or no intervention for weakest-link GPGs is required as countries match one another’s

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efforts. With heterogeneous incomes (the norm), however, some countries do not possess the means to achieve acceptable surveillance or vaccination standards so that their efforts must be “shored up” or bolstered by rich countries, multilateral institutions (e.g., World Bank), charitable foundations, NGOs, and multi- stakeholder partnerships (e.g., Global Fund, Onchocerciasis Control Partnership, and Global Alliance for Vaccines and Immunization [GAVI]).

A softer form of weakest link is weaker link for which the smallest provision has the greatest marginal influence, followed by the next smallest, and so on. COVID-19 activities associated with weaker link include maintaining COVID-19 safety standards for international transportation (e.g., air travel and cruise ships), imposing effective quarantines, and collecting vital COVID-19 statistics. The need for matching behavior is less necessary for weaker-link than for weakest-link ac- tivities. Nevertheless, rich countries, multilaterals organizations, multi- stakeholder partnerships, and other institutions can assist some countries with insufficient funds to achieve a more acceptable standard of activity. Assistance may assume the form of in-kind provision or financial aid. Similar to weakest-link activities, there is an incentive to bolster other laggard countries’ efforts since all countries gain from a larger standard of provision. Shoring up weakest- and weaker-link activities confront a free-riding concern as many countries profit from letting others to do the shoring up. Thus, the presence of multi-stakeholder in- stitutions that champions such activities (e.g., vaccination), along with NGOs can help address this free-riding concern.

Some COVID-19 activities are best-shot GPGs where only the largest provision level fixes the overall amount available for consumption. Developing a COVID-19 vaccine, finding new anti-viral drugs, and isolating the COVID-19 virus abide by the best-shot aggregator. Often, but not always, efforts should be concentrated where talent, knowledge, and resources are the greatest, thus fostering a faster breakthrough for a vaccine or anti-viral drug. Coordination is the key so that efforts are not wasted or misdirected. For COVID-19, rich countries are sufficiently moti- vated given the dire consequences of no vaccine or ineffective drugs. In the case of vaccines, however, competition is a good thing insofar as there are multiple ways of developing a vaccine and there is sufficient expertise in the United States, the United Kingdom, France, Germany, Italy, and China. Once one or more promising vaccines are in advanced stages of development, countries can pool and coordi- nate efforts on testing, production, financing, and, eventual, distribution. Part- nerships among drug companies, rich countries, WHO, multilateral institutions and multi-stakeholder partnerships have real coordination and distribution roles to play as they did for eradicating smallpox and Onchocerciasis (river blindness).

Better-shot GPGs involve an aggregator where the largest provision has the greatest marginal influence, followed by the next largest, and so on. Discovering

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effective COVID-19 treatment regimens and developing COVID-19 tests adhere to a better-shot aggregator. For better-shot activities, there is less need for concen- trated effort compared to best-shot activities, but some coordination is useful to avoid too much duplication. Some competition is especially conducive for a wider range of novel alternative treatment regimens that favor some patients’ conditions over those of other patients. Patients’ tolerance to such regimens also differs, justifying alternatives, some of which may be less effective than others but better suited for some underlying conditions. There is less need for coordination for better-shot than for best-shot activities.

Weakest-link and weaker-link COVID-19 activities constitute more difficult collective action concerns than best-shot and better-shot activities. For weak-link activities, even a single under-performing country can largely undo the collective action achieved by all other countries, as displayed by China’s initial surveillance and reporting failures. Best-shot activities can be achieved by well-endowed countries that, in the case of COVID-19, are motivated to act. Duplication of vac- cines or anti-viral drugs is much less of a concern than weakest-link failure to meet acceptable standards of quarantine or herd immunity.

When the cumulative contribution to an activity must surpass a threshold before benefits flow, a threshold aggregator applies. In particular, social- distancing practices must be sufficient for there to be a measurable “flattening” in cases. In addition, all countries must possess an acceptable healthcare infra- structure for the global community to be protected from the rapid emergence of hotspots that propel infections abroad. This is a particular concern for developing countries that require continued aid from multilateral and bilateral donors to build up those countries’ infrastructure.

Finally, a weighted-sum aggregator corresponds to a GPG where each coun- try’s action has a different additive impact or weight on provision, for which weights can be spatially based, like the case of acid rain. From a global viewpoint, some countries may present a greater risk of spreading the disease owing to in- ternational travel considerations (i.e., the possession of a major hub airport). The cleansing of COVID-19 from the environment may also hinge on spatial and pop- ulation density consideration, thereby abiding by a weighted-sum aggregator.

Table 1 provides a ready summary of seven iconic aggregators, their COVID-19 counterparts, and select public policy implications.

4 Some Guiding Principles

Embedded COVID-19 activities abide by diverse aggregator technologies, so that policy recommendations must be tailored accordingly. Some activities possess

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Table : Alternative aggregation technologies for COVID-.

Aggregation technology COVID- Public policy implications

Summation: associated public good levels equal the sum of individual contributions.

Stockpiling protective equipment, testing of population members, expanding hospital treat- ment capacity.

Need for international cooperation for infectious diseases such as COVID-.

Weakest link: only the smallest provision level determines the associ- ated public good level.

Surveillance of COVID- outbreak after discovery, obtaining global herd immunity.

When the countries have similar in- come, little intervention is required. If, however, acceptable standards for COVID- cannot be met by poor countries, rich ones must bolster (shore up) the poor countries’ ca- pacity. Rich countries, multilaterals, and others can also bolster capacity.

Weaker link: the smallest provision has the greatest marginal influence, fol- lowed by the next small- est, and so on.

Achieving COVID- safety for international trans- portation, imposing effective quarantines, collecting vital statistics.

The need for matching behavior is less pronounced than for weakest-link COVID--related public goods. Rich may assist poor countries since COVID- poses a global danger. Assistance may in be in-kind or monetary.

Best shot: only the largest provision determines the overall public good level.

Developing a COVID- vaccine, finding new anti- viral drugs, initially isolating the COVID- virus.

Effort must be concentrated where talent is the greatest. Coordination in the form of directing resources to those most likely to succeed is desirable unless competition speeds alternative discoveries. There is a role for charitable trusts, NGOs, and multilaterals.

Better-shot: the largest pro- vision has the greatest marginal influence, fol- lowed by the next largest, and so on.

Discovering effective treat- ment practices, devel- oping COVID- tests.

Somewhat less need for concentrated effort, but some coordination still required. Some concentration of re- sources is still required. Competition is conducive to a wider range of discoveries.

Threshold: cumulative contribution must surpass a threshold for benefits to be received.

Achieving sufficient social- distancing practices, obtaining acceptable health infrastructure.

Transnational coordination is needed so that threshold is met. Multi- stakeholder organizations and char- itable trusts can play an important role.

Weighted sum: each contri- bution can have a different additive impact.

Curbing spread of COVID-, cleansing COVID- from the environment.

Need for intervention must be on a case-by-case basis. Localized bene- fits may limit the need for interna- tional policy intervention.

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better collective action prognoses than others so that the form for corrective policy varies among activities, based on the underlying aggregator technology. The preponderance of weakest-link aggregators indicates the importance of capacity, thereby highlighting action to shore up efforts of poor countries to achieve acceptable standards. By contrast, best-shot COVID-19 activities require coordi- nation, pooling, and competition within the global community. Multi-stakeholder partnerships, multilateral organizations, rich countries, charitable foundations, networks, and NGOs have an essential role in achieving capacity, reaching thresholds, and pooling efforts to reach collective action goals. In particular, multi-stakeholder partnerships are especially well-suited in addressing collective health issues. Such a partnership can draw on the comparative advantage of its constituent parts in terms of drugs, medical expertise, distribution networks, and funding as aptly illustrated by the Onchocerciasis Control Partnership (OCP). The OCP consists of a coalition involving Merck, WHO, host countries to the disease, and donor countries and the World Bank. This article examines collective action among countries, but there is also collective action concerns within countries, such as abiding by social distancing, that can be addressed in future work.

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