A strong but uneven government response to COVID-19

The power of the state was re-asserted during the COVID-19 crisis, but huge monetary and fiscal interventions in the US and UK failed to address long-term structural issues and geographic disparities, says a study co-authored by Michael Kitson, Associate Professor in International Macroeconomics and Director of the Cambridge MBA programme at Cambridge Judge Business School. 

The paper, published in ‘Cambridge Journal of Regions, Economy and Society’, focuses on how geography – international, inter-regional and inter-urban within countries – played a key role in shaping state responses to the pandemic, and how these factors may develop following the pandemic. 

“How the state changes or mutates in a post-COVID-19 world will inevitably have implications for both national state-local state relations and structures,” conclude the authors, who also include academics from the Department of Geography at the University of Cambridge and The Ohio State University. 

Growing disparities will need to be addressed in post-COVID-19 world 

“The pandemic and its uneven geographical impacts have opened up tensions between the national and local state, as well in many instances intensifying what were already growing spatial disparities in economic prosperity, opportunity, health outcomes and welfare. Whatever form the post-COVID-19 state takes, it will need to address this problem of growing spatial socio-economic disparities.” 

The study, which includes a review of various aspects of how governments responded to the pandemic, focuses largely on the US, the UK and China. 

The federal government response in the US was remarkable in some ways, including the largest economic relief package in history with more than $5 trillion in fiscal support, thus demonstrating the power of an activist state’ 

US government assertion didn’t bring transformation 

But the pandemic brought to life how the state “remains ineffective in ameliorating structural inequalities of class, racial/ethnic and gender,” the authors say. “Black, Hispanic and poorer people suffered at higher rates of illness and death from the epidemic, largely because of where they lived and worked.” 

“In short, while the value of the state was reasserted during the pandemic, structural issues persist” in the US, and state intervention in the economy and healthcare “have not yet sparked wide-ranging transformation.” 

The UK’s state response to the crisis was unprecedented during peacetime, including quantitative easing, grants and loans to support businesses, and a sweeping plan to pay furloughed workers. 

Yet, as in the US, these economic interventions “were socially and economically spatially uneven”, with London and surrounding areas benefiting the most.  

Very centralised response in the UK compared to China 

“The UK’s response was extremely centralised and local government knowledge of local communities and spending priorities were largely by-passed. However, some local leaders used the visibility of the spatial unevenness of the pandemic and the economic response to the pandemic to voice a political counter-narrative.” 

In China, the initial focus of the global pandemic, the paper identifies a more geographically oriented response as seen in the country’s zero-COVID-19 policy. 

“Although China is often perceived as a highly centralised state, areas adopted different responses based on the number of cases, the size of the population and their economic structure,” the paper says.  

“The more prosperous cities, that have more resources and better healthcare, adopted a less rigid policy compared to less developed regions. The flexible approach to the zero-COVID-19 policy partly reflected the differential economic impact as the prosperous areas were more likely to suffer a downturn from COVID-19 containment policies.” 

Locking some out of prosperity is the end of belonging 

The paper argues that how the state changes or mutates in a post-COVID-19’ world will have major implications for both national state-local state relations and structures. The study concludes by quoting from the 2020 book by economic commentator Martin Sandbu, ‘The Economics of Belonging’,  in urging state policies that benefit all citizens: “An economy – and a politics – that benefits some people and places while locking others out of prosperity is what the end of belonging means.” 

The study – entitled “Understanding the post-COVID-19 state and its geographies” – is co-authored by Mia Gray of the Department of Geography at the University of Cambridge, Michael Kitson of Cambridge Judge Business School, Linda Lobao of Ohio State University, and Ron Martin of the Department of Geography at the University of Cambridge.