When considering a policy as unprecedented and far-reaching as a nationwide lockdown, you’d assume the Government would carry out a cost-benefit analysis. After all, such analyses are routine in policy-making.
For example, the Treasury maintains a document called ‘The Green Book’, which gives detailed guidance on how to compute the costs and benefits of particular actions. It refers to concepts such as opportunity cost, discount factors and adjusting for inflation.
You might say there wasn’t much time to carry out a detailed cost-benefit analysis before the first lockdown last March. (Though the Government could have provided a few rough numbers for the public to scrutinise.) However, it’s now more than a year later, and there still hasn’t been any attempt to weigh the costs and benefits.
In a report for the Institute of Economic Affairs published last December, the economist Paul Ormerod argued that the Government’s refusal to crunch the numbers reflects a general overreliance on epidemiological expertise, at the expense of economic expertise.
As Russ Roberts, another economist, has observed, “Knowing a lot about the human body does not make you an expert in risk analysis, tradeoffs, or unintended consequences.” Note: this is not to imply that all or even most economists are opposed to lockdowns, but simply that key insights from that discipline have been overlooked during the course of the pandemic.
Since the NHS typically pays up to £30,000 to extend a patient’s life by one quality-adjusted life-year, a reasonable estimate of the benefits of lockdown can be obtained by multiplying the expected number of life-years saved by 30,000.
For example, if we assume (generously) that lockdowns saved 50,000 lives and prevented 500,000 people from getting long COVID, then the total benefits would be about £16.5 billion. This figure then has to be weighed against some measure of the costs (including effects on the economy, health, education and civil liberties). Given that the fall in GDP alone last year was over £220 billion, it seems very unlikely that lockdowns would pass a cost-benefit test.
The Government’s lack of interest in cost-benefit analysis was highlighted in a recent LinkedIn post by Daniel Fujiwara – an expert in policy evaluation. Fujiwara was apparently invited to “meet with senior Government officials to discuss the pros and cons of lockdown”. However, despite offering his advice and input pro-bono, he “never heard back from them”.
In the post, Fujiwara goes on to say, “Lockdowns should have stopped at the point where an additional day of #lockdown causes more damage to our society than it benefits us… My analysis of the impacts of lockdown last year suggests that we have gone well beyond this threshold.”
One can only assume that the Government’s failure to publish even basic estimates of the costs and benefits of lockdown is due to fear of what those estimates might show…