CDEP-CGEG WORKING PAPER NO. 84

The Epidemic Effect: Global Governance Institutions Can Mitigate the Effects of Epidemics

Belinda Archibong, Francis Annan, and Uche Ekhator-Mobayode

Abstract:

Epidemics of infectious disease can have deleterious effects on economic development except mitigated through global health governance institutions. We investigate this hypothesis by examining the effects of sudden exposure to meningitis on economic outcomes using evidence from the meningitis belt in sub-Saharan Africa. Meningitis shocks reduce economic activity and child health outcomes in periods when the World Health Organization (WHO) does not declare an epidemic year. These effects are reversed when the WHO declares an epidemic year. A primary mechanism explaining the heterogeneity in results may be the influx of disaster aid when the WHO declares an epidemic year. We document an increase in World Bank health projects approved and funded during epidemic years. Areas that receive more health spending have higher economic activity, though health projects funded during epidemic years last for shorter periods and are rated relatively worse by independent evaluators.
 

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