In a new series of ‘Wellblogging’ columns, Arthur Grimes examines research-derived insights that can help decision-making designed to promote wellbeing in the context of Covid-19, and asks first whether our strict lockdown was the right decision
One major set of decisions around Covid-19 was whether we – and other countries – should have entered a strict lockdown as the disease took hold.
Not all countries did so – Sweden and Belarus are examples of those that followed a different path. (And, of course, there are others that followed no coherent path, but we won’t dwell on those.)
A key difficulty when deciding about lockdown was the high level of uncertainty about many of its features. For instance, there were uncertainties initially about how contagious it was, whether or not it could be transmitted by people with no symptoms and what the expected death rate would be.
There are well-developed tools for making decisions in the presence of uncertainty. In economics, the relevant approach is known as ‘real options theory’ and in other fields (e.g. environmental management) it is known as ‘adaptive management’.
These approaches are relevant when four conditions exist:
(i) There is uncertainty about key factors relevant to policy
(ii) We can learn about these factors over time and so reduce the degree of uncertainty
(iii) We have some leeway over the timing of decisions
(iv) Once undertaken, the costs (and benefits) of the policy are irreversible.
These four conditions were all present when making the lockdown decision.
A key adaptive management insight when making decisions under uncertainty is the importance of retaining as much flexibility as possible for future decisions. We know decisions in future can be made once we learn more about the uncertain factors (e.g. degree of contagion). This insight normally means policy actions may be best delayed until some of the uncertainty is resolved.
In the case of Covid, however, delay in the lockdown response would have extinguished the possibility of eliminating the disease from New Zealand. This outcome is due to Covid’s exponential spread once established.
Delay would therefore have lost one important aspect of flexibility for future responses. Application of the adaptive management approach was exhibited via quick action to impose the lockdown, so maintaining the option to eliminate the disease domestically. If the lockdown subsequently proved unworkable or ineffective, policy-makers could always reverse the lockdown and allow the disease to spread.
Even a short delay in implementing actions designed to eliminate Covid would have made subsequent elimination impossible due to the exponential spread
An added complexity in the Covid case is that, by acting quickly, negative economic effects were guaranteed, although again the degree of these effects was uncertain. A delayed reaction to imposing the lockdown would have maintained employment at a higher level initially; hence the early actions to eliminate Covid gave up the option to maintain this higher initial level of employment.
But there were uncertainties relating both to economic outcomes if the lockdown was imposed and to economic outcomes if no actions were taken. Other uncertainties related to whether or when an antiviral drug or vaccine would appear, and hence how long the various negative effects would last.
… if the lockdown was successful, there would be significant economic losses but these losses were unlikely to spiral upwards in an exponential fashion
In the face of these multiple sources of uncertainty, what were policymakers to do? Even a short delay in implementing actions designed to eliminate Covid would have made subsequent elimination impossible due to the exponential spread of the disease.
This exponential spread – which makes the disease essentially unstoppable once it proceeds beyond a small proportion of the population – can be contrasted with the more linear path of economic losses caused by a lockdown.
Put simply, if the lockdown was successful, there would be significant economic losses but these losses were unlikely to spiral upwards in an exponential fashion.
The ability to maintain flexibility for future policy actions was at the heart of the lockdown response. This policy choice is in keeping with the optimal strategy suggested by adaptive management and real options approaches.
With hindsight, we might find out this strategy was the best response or we may find out it wasn’t. But hindsight will not be the appropriate way to judge the actions taken. The jury should decide on the information and uncertainties available when the lockdown decision was made.
My judgment is that the retention of flexibility to eliminate the disease was the correct policy decision – despite the guaranteed economic costs – given the multiple uncertainties involved.