May, 2021

Governing Nested Externalities during a Pandemic

Social Distancing as a Coproduction Problem
  • Veeshan Rayamajhee

    Assistant Professor of Economics, North Dakota State University
  • Shikhar Shrestha

  • Pablo Paniagua

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Containing the spread of a virus during a pandemic requires citizens to self-discipline and adopt precautionary measures. This paper focuses on one such measure: social distancing. Governments can force citizens to comply with social distancing by imposing mandates and increasing penalties. However, constitutional restraints prevent governments in democratic societies from utilizing extreme measures. Thus, a pandemic presents an extreme case in which the goals of security (virus containment) and individual freedom appear irreconcilable. Moreover, a pandemic presents collective action problems, because a few defectors, who can remain undetected, can impose incalculable costs on a society. This predicament leads many to make a case for draconian measures to force compliance. We present an alternative take that views social distancing as a coproduction process; that is, virus containment requires active participation and a high degree of cooperation from citizens. Because external costs are difficult to measure and it is near impossible to monitor and sanction violations, coercive measures that do not account for coproduction processes are unlikely to succeed. Instead, strengthening existing mechanisms for mutual monitoring and sanctioning that are consistent with the norms and val