When crippled with COVID-19 infection, a substantial number of countries have adopted ‘lockdown’ or similar measures to suppress the spread. This instrument is often considered as the only viable option for curbing infection spread both in developed and developing countries; however, some experts have a cynical view on its effectiveness. Exploiting cross-country lockdown information, effectiveness of lockdown on slowing the pace of COVID-19 can be elicited.
The study intends to understand whether lockdown or similar measures can suppress infection growth in developing countries. In this pursuit, the study uses panel regression-based difference in difference and GMM estimation method.
This study finds that lockdown type measures are not as effective in developing countries as in developed nations. Nevertheless, staying at home order, income support programs, and other social distancing measures are found to be effective for both developed and developing countries. Also, the timing of the lockdown is found to be vital. One the one hand, enforcing a nationwide lockdown too early, i.e., when cases are very low, may not yield expected outcome; on the other hand, enforcing lockdown too late is also ineffective.
Even though this study does not find strong evidence of the effectiveness of lockdown in curbing infection growth in developing countries, these findings do not necessarily suggest that lockdown should not be enforced in developing countries. Rather it indicates that lockdown should be combined with other complementary measures such as contact tracing, extensive testing, income support for the poor, effective management of informal and migrant workers to make the lockdown effective. Merely declaring lockdown, without accompanying other must-have measures, will hurt the economy without contributing much to reducing the growth of infection.
JEL Codes: H2, H3, I1, I3