Fighting #COVID19 involves horrible trade-offs. In this paper with @ricardo_hausman, we show why they are particularly excruciating in developing countries and why there is a dire need of immediate and massive financial support. https://growthlab.cid.harvard.edu/publications/horrible-trade-offs-pandemic-lockdowns-transfers-fiscal-space-and-compliance

Many debates evolve around a trade-off between lives and livelihoods. This implicitly asks: How strict a lockdown are we willing to afford?

But what if part of society is threatened by deprivation, already struggling with making a living in normal times?

In such cases, optimal policy is not so much about a societies’ willingness to afford, but about its sheer ability to endure a lockdown. In other words, the central trade-off is one between saving people from the disease or from deprivation.

Transfers to vulnerable parts of society may help alleviate this excruciating trade-off, but many developing countries lack the fiscal space to do so, with horrible consequences:

We show that these countries are forced to fight less the pandemic, more people die from the disease, and still part of society may suffer from deprivation.

The international community has the means to prevent such humanitarian tragedies. As Ricardo has said, this is the right thing to do. Considering the global nature of the pandemic, it is also the smart thing to do.