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On Coase and COVID-19.

Darcy W E Allen1, Chris Berg1, Sinclair Davidson1

  • 1RMIT University, Carlton, Australia.

European Journal of Law and Economics
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Summary

This study explores economic approaches to the COVID-19 pandemic, moving beyond traditional social cost-benefit analysis. It proposes a Coasean framework for a better understanding of minimizing social costs through institutional analysis.

Keywords:
COVID-19Coase theoremComparative institutional economicsEconomics of pandemicsExternality

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Area of Science:

  • Economics
  • Public Health
  • Epidemiology

Background:

  • The COVID-19 pandemic presents significant public health and economic challenges.
  • Existing economic policies often rely on Pigovian analysis and social cost-benefit calculations.
  • These traditional approaches may not fully capture the complexities of managing infection externalities.

Purpose of the Study:

  • To examine alternative economic methodologies for understanding externalities.
  • To explore how an exchange-focused and institutional analysis can minimize social costs.
  • To develop a comparative institutional analysis of pandemic response strategies.

Main Methods:

  • Utilizing a Coasean economic framework.
  • Applying an institutional analysis to economic externalities.
  • Conducting a comparative analysis of different institutional approaches to pandemic response.

Main Results:

  • An exchange-focused and institutional analysis offers a superior understanding of minimizing social costs.
  • The Coasean framework provides a robust method for comparative institutional analysis of pandemic responses.
  • This approach moves beyond traditional Pigovian analysis for externality management.

Conclusions:

  • A Coasean, institutionally-focused economic analysis is valuable for understanding and mitigating pandemic-related social costs.
  • This framework offers a more nuanced approach to managing externalities compared to traditional methods.
  • Further research can refine comparative institutional analysis for public health crises.