Paying a Terrible Price for Protecting Global Health
In November 2021, Botswana and South Africa reported the presence of the new omicron SARS CoV-2 variant to the WHO and the world, significantly aiding the global fight against COVID-19. As a result of this important action, many countries imposed an immediate flight ban to southern Africa, which devastated trade and tourism across the region. This episode recapitulated numerous previous examples of the same principle: that “when developing countries report outbreaks, they often derive few benefits and suffer disproportionately heavy social and economic consequences.” Studies of multiple epidemics have shown that well-founded concerns about these economic consequences can delay reporting in the early days of an epidemic, when lost time can be crucial.
The terrible paradox is that countries that serve the global good of rapid and transparent disease reporting often pay the most significant penalties for acting in the common good. In other circumstances in which one person or entity suffers a particularized loss to promote a general good, governments and other bodies have set up compensation mechanisms to offset individual harms incurred for a common benefit.
Pandemic Compensation Initiative
PAX sapiens is launching a program to collaboratively design a compensation mechanism to address the perverse disincentives that apply to those countries that fight emerging epidemics resolutely. The program will offset the individualized economic harms that come from swift disease reporting. Because this reporting contributes to the common good of better pandemic prevention, a compensation mechanism providing economic security to these countries is in the world’s interest.
The first stage of the Pandemic Compensation Initiative will be to convene a diverse panel of experts to design the parameters of a compensation mechanism. This expert panel will be drawn from different economic and geographic sectors with a variety of expertise, and will be informed by extensive stakeholder consultation.
Crucial topics to be addressed through the panel’s deliberative process, over the next 18 to 24 months, include the scope of the compensation mechanism, the kinds of damages that will be eligible for compensation, which entities are compensable, and which entity is best suited to administer a compensation program. Since the answers to these questions have cost implications, the draft proposals of the expert panel will be analyzed by an economic team to provide budgetary estimates, which can be taken into account in finalizing the design of the compensation mechanism.
