Could the pandemic cause economists to rethink welfare? | The Economist

Could the pandemic cause economists to rethink welfare?

At the American Economic Association's annual shindig, Emmanuel Saez argues for change

EVERY JANUARY a curious migration occurs. Thousands of economists from around the world flock to a big American city for the annual meetings of the American Economic Association (AEA). The pandemic upended the rite this year, and instead enabled conference attendees to peer into the living rooms and offices of scholars as they presented their work, much of it focused on the consequences of covid-19, on Zoom. The events of 2020 drew attention to the importance for prosperity of factors that economists often neglect, such as state capacity and social trust. Perhaps in a sign of change to economic thinking to come, some of the fare on offer at this year's shindig suggested that raising welfare is often more a matter of collective choice than maximising efficiency.

Discussions of the role of social norms and values were scattered throughout the conference. Scholars presented work showing that higher levels of trust and social responsibility were associated with less scepticism of media reporting on covid-19 and greater willingness to accept stringent lockdown measures. Other research demonstrated that gender-related aspects of corporate culture are in large part determined by the norms prevailing in local society, but can nonetheless be shaped by national policy. Still other papers examined how economic factors contributed to the unravelling of political norms and the eventual collapse of democracy in Europe before the second world war.

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