A Parallel between Settler Mortality and COVID-19

Over the course of history, the economic development levels of core nations, which are the industrialized and capitalist nations of the world system, have come by virtue of globalization processes and state interdependencies. However, amidst the current pandemic, one of the main factors that is helping to curb the spread of COVID-19 is anti-globalization. In peripheral and developing regions that embody large rural geographies, where social distancing is already a way of life, citizens of these regions are noted to be at a lower risk of infection (Baragona, 2020). Currently demands for self-isolation have already eliminated years of economic growth. COVID-19 has, essentially, inflicted significfant economic strains for most core, or developed, nations. On the contrary, peripheral states, or poor, underdeveloped nations whereby most households engage in subsistence lifestyles, are actually experiencing an advantage with regards to their responses to the disease. According to Daron Acemoglu, Simon Johnson, and James Robinaon, exogeneity tends to incur a higher risk of disease and infectivity due to geographical and climate differences in certain regions, and that some regions and parts of the world have higher risk of disease in comparison with other geographical locales (Acemoglu et al., 2000). However, this notion is completely unrelated to the factors that have direct influences on GDP. In actuality, the spread of COVID-19 is more related to labor mobility and interstate dependency (Acemoglu et al., 2000). One of the causes for this has been the cross-border labor and resource mobility that determines the reach of the pandemic (Baragona, 2020). As such, it has come to light how imperative domestic institutional capabilities and import substitution are for coping with the prevailing supply and drug shortages currently being experienced and for effectively slowing the spread of COVID-19.  

Historically, causation as a method of analysis has always been used to determine corollary relationships. However, with regards to the instrumental variables analysis that Acemoglu references, it is important to determine the relationship and correlation between the instrument and the outcome, as this correlation serves to reflect the true causal effect of the treatment on the outcome which, in turn, serves to show the correlation that countries with lower mortality rates tend to have higher GDP levels (Acemoglu et al., 2000). Within this theory of development, geographical locales with lower settler mortality rates, during the colonial era, are expected to embody higher property rights during present times. This notion aims to support the argument that colonies that embody stronger institutions tend to experience higher economic development levels (Acemoglu et al., 2000). However, this claim is misguided as there does not exist a direct correlation between these two variables due to outside, confounding factors. For example, Acemoglu’s hypothesis argues that settler mortality, which is the instrument, has a direct effect on the treatment variable, which is property rights. Therefore, as Acemoglu’s settler mortality theory argues that settler mortality rates directly reflect the economic development of colonial states, although European extractive institutions persisted during the 18th century and led to economic growth for European states, there does not exist a clear correlation between institutional strength and settler mortality (Acemoglu et al., 2000). Rather, there are many external variables that could also have had an effect of mortality rates, whereby validating that there does not exist a strong correlation between settler mortality rates 

When the novel coronavirus first emerged, it was inferred that the domestic households of states with poor domestic institutions were to be most affected. However, it has actually been wealthier countries, specifically those that have stronger political institutions and globalized economies, that have become most affected by the pandemic (Baragona, 2020). One of the reasons for this occurrence is due to the effects of globalization on the core states, specifically in how they have extensive economic and political connections to the country where the disease originated – China. As there currently is no treatment for COVID-19, national advisories have focused on curbing the disease’s global reach. Therefore, due to the geographic and economic characteristics of less-globalized topographies, residents of developing and peripheral nations may be at a slight advantage, as the lack of global economic and political integration is helping these countries to be less exposed to the virus (Coe et al., 2013). Therefore, even if some peripheral healthcare systems are not as developed as that of core states, it has been widely noted that the prevalence of anti-globalization in these states is actually helpful in protecting these states from the reach of COVID-19 (Baragona, 2020). 

With regards to COVID-19, using regression analysis to determine a causal relationship between the spread of the disease and institutional variations across nations would require us to measure every possible confounder, which is almost impossible (Acemoglu et al., 2000). Therefore, since we can’t experiment and use regression analysis, the instrumental variable analyses would fail to help us to determine the causal factor that led to the pandemic. 

Historical cases of economic development have exemplified the lack of correlation between settler mortality and economic development. In tangency with the current pandemic, although colonization persisted during the 18th century and led to economic growth for European states, there does not exist a clear correlation between institutional strength and settler mortality (Acemoglu et al., 2000). Therefore, even if the healthcare systems of some developing and peripheral states are inferior to that of the US, the phenomenon of anti-globalization in these nations is, although economically undesirable, actually helpful in protecting them from being exposed to COVID-19 (Sparke, 2013). This serves to lament why import substitution, social distancing and avoiding large gatherings is so imperative for conquering the disease’s spread and diminishing the potential economic and social harm that will follow if we don’t follow these guidelines. 

References:

Acemoglu, D., Johnson, S., & Robinson, J. (2000). The Colonial Origins of Comparative Development: An Empirical Investigation. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.244582

Acemoglu, D., Johnson, S., & Robinson, J. (2001). Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.290824

Baragona, S. (2020). Why COVID-19 Hit High-Income Countries Harder. Voice of America. Retrieved 28 April 2020, from https://www.voanews.com/covid-19-pandemic/why-covid-19-hit-high-income-countries-harder.

Capbell, C. (2020). Impact of Coronavirus on China's Economy Only Just Beginning. Time. Retrieved 8 May 2020, from https://time.com/5824599/china-coronavirus-covid19-economy/.

Coe, N., Kelly, P., & Yeung, H. (2013). Economic geography. Wiley.

Fine, B. (2006). New Development Economics. Zed Books.

Korbey, M. (2020). Coronavirus (COVID-19): Important Information about Social Security Services | Social Security Matters. Blog.ssa.gov. Retrieved 8 May 2020, from https://blog.ssa.gov/coronavirus-covid-19-important-information-about-social-security-services/comment-page-25/.

Sen, A. (1983). Poverty and famines. Oxford University Press.

Sparke, M. (2013). Introducing Globalization: Ties, Tensions, and Uneven Integration (1st ed.). Wiley-Blackwell.

Tone, S. (2020). Why Informal Workers Are Opting Out of China’s Welfare System. Sixth Tone. Retrieved 8 May 2020, from https://www.sixthtone.com/news/1004594/why-informal-workers-are-opting-out-of-chinas-welfare-system.