Do corrupt emerging markets respond to COVID-19 differently?

· 2 min read

TL;DR: Yes—corrupt emerging markets respond to COVID-19 more intensely.


This past semester, I took an economics course about emerging markets.1 At the end of the course, we were placed into teams tasked with researching and presenting any topic of our choosing, so long as it related to emerging markets. We decided to investigate the relationship between corruption and COVID-19 in emerging markets.

Whenever you read “emerging markets,” we are referring to economies that the IMF considers to be emerging markets.

Longer TL;DR:

  1. Corrupt emerging markets generally tend to be more autocratic, and autocratic countries consequently clamped down on COVID-19 more severely.
  2. This more extreme initial response was comparatively less effective.
  3. In fact, corruption is correlated with a faster infection rate.
  4. A potentially useful future model that reconciles corruption and autocracy could be $R = \beta te^{-\lambda t}$, where $R$ is the severity of COVID-19 response, $\beta$ is level of autocracy, $\lambda$ is level of corruption, and $t$ is days since first case.

Let me see the slides.2


1

If you wonder why the world looks the way it does economically, you should consider taking 73-421.

2

This is the work of amateur economists, so feel free to get in touch if you find something amiss, would like to discuss further, or want to see our data.