Welcome to Plugging the Gap (my email newsletter about Covid-19 and its economics). In case you don’t know me, I’m an economist and professor at the University of Toronto. I have written lots of books including, most recently, on Covid-19. You can follow me on Twitter (@joshgans) or subscribe to this email newsletter here.
It was inevitable really. We were always going to have vaccine shortages. And with that some countries (both rich and those who manufacture vaccines themselves) were going to look to serve their own wants before those of others. This podcast episode from Tim Harford covers the issues. The hope is that this is an issue for the next three to six months and then it will relax as supply constraints are alleviated.
But the debate about whether a country should prioritise itself has, naturally, moved to whether that is ethical or not. Look, whenever you think about it, having anything depend on the place you happen to live in, especially a political construction like a nation-state, is never going to be ethical. The only ethically sound distribution and rationing scheme precludes such things. So on that score, yep, it’s unethical but we aren’t going to resolve those issues any time soon.
The counter to this is some appeal to practicalities. Vaccines can be hard to transport and there are distribution challenges. You can use those to rationalise pretty much any policy and governments are using those arguments. Again, that doesn’t get us far.
But here is the “right” practical argument. There are two benefits of mass vaccination. The first is to protect those at risk. The second is to reopen the economy.
Let’s start with the health equation. On that score, the consensus is to vaccinate all those above a certain age threshold (usually 65). So if, say, the UK prioritises its elderly before those of other countries, then, yes, from an ethical perspective it doesn’t look right but from a practical perspective, one person vaccinated somewhere is just that and the total numbers matter. So if the order prioritises those in the UK, then this doesn’t change the total numbers. Hence, it is neutral.
That falls apart once you start vaccinating non-at-risk people before those at-risk. The UK hasn’t got there yet but it likely will. If it continues to prioritise its own once we are out of the risk category, then the practical argument isn’t going to hold water.
Which brings us to the economics. Here is the thing: at the moment, you can’t restore the economy without vaccinating pretty much everyone in a region. On that score, there is a certain efficiency to prioritising some regions (which may be countries) over another. The challenge is how to choose which region but given that achieving economic benefits requires going region by region it is the total that matters.
Here is the big argument that my guess, eventually, richer countries will fall back on. Yes, we prioritised ourselves but this worked out because our economies got going sooner and that ended up helping others compared to a situation where we would keep all economies shut until everyone in every economy had been vaccinated. There is a very solid argument that the ‘fair’ approach is highly economically inefficient.
But not every country. Put simply, the bigger your country, the more of a challenge this argument is. If you have an economy like the US or Canada, you want to prioritise some regions over the others. But that is not what these countries are doing. They are spreading the vaccine around and pursuing the economically inefficient path. Now how can they then turn around and, say, that country-level priority was efficient when in their own regions they didn’t do that.
Here’s the thing, if you, as a country want to come out of this on the right-side of history — and that is a big “if” for many — it seems to me that you do not, at this stage, crimp vaccination programs at home to come out of this looking good. What you need to do is provide doses to other countries, especially those where Covid-19 is raging, as soon as you have taken care of your ‘at-risk’ population. After that, you want to apply the economically logical approach within your own country to actually achieve those benefits and then target other countries for reopening vaccine levels thereafter. If you don’t do this, then expect it not to look defensible in the history books.