Political institutions and policy responses during a crisis

Do countries with differing political institutions respond differently to a national crisis? The coronavirus pandemic, where almost all countries were hit by the same crisis in a short span of time, provides a rare opportunity to answer this question. We look at high frequency data on two such measures of containment policies for a sample of about 150 countries - (i) containment policies, relating to closure of public spaces and restrictions on movement of people, and (ii) health policies, relating to public information campaigns, testing and contact tracing. We show that, before the emergence of the first case, autocratic countries, relative to their democratic counterparts, are systematically more aggressive on their containment and health responses. However, once the crisis hits the respective countries, the democracies either match up to autocracies (in case of containment policies) or surpass them (on health policies) within a week. The results are robust to controlling for all time invariant differences between countries. Importantly, the effect does not go away several weeks after. Focusing only on democracies, we find that the effect on medical policies is concentrated more in countries with greater media freedom. Finally, better electoral performance of the chief executive in the last election (for presidential democracies) and remoteness of the next election (for parliamentary democracies) seems to positively affect policy aggressiveness. Our analysis suggests that political institutions and the incentives of the political leaders embedded therein significantly shape response of governments to a national crisis.