Trust, social protection, and compliance: Moral hazard in Latin America during the COVID-19 pandemic

Bird M.D.; Arispe S.; Muñoz P.; Freier L.F. · Journal of Economic Behavior and Organization (2023) · DOI: 10.1016/j.jebo.2022.12.010

Resumen

Political trust is an important predictor of compliance with government policies, especially in the face of natural disasters or public health emergencies. During the COVID-19 pandemic, for example, multiple studies related political trust to increased compliance with mobility restrictions. Yet these findings come mostly from high-income countries where political trust and wealth correlate positively. In Latin America, both variables correlate negatively, allowing for better testing of competing explanations. Using a difference-in-differences design, we find that in Latin America wealth and, counterintuitively, low political trust predict increased compliance. To understand mechanisms, we decompose political trust and wealth into underlying predictors (social protection, corruption, and education) and reinsert them into the model. While education, as a wealth proxy, predicts decreased mobility across all periods, social protection, which was the strongest predictor of political trust, relates significantly to increased mobility, but only at the beginning of the lockdown prior to distribution of emergency support. This suggests the existence of a public health moral hazard early in the pandemic, whereby citizens who benefited previously from government benefits may have been more risk tolerant in the face of the COVID-19 threat. We interpret these findings within the context of the region's recent “inclusionary turn.” Future studies should explore the distinct relationships between political trust, risk perception, and compliance, especially in low- and middle-income countries, and their implications for policy responses to national emergencies.

Instituciones: Universidad del Pacífico