Exogenous shocks and citizens’ satisfaction with governmental policies: can empirical evidence from the 2008 financial crisis help us understand better the effects of the COVID-19 pandemic?

Abstract

I examine to what extend the financial crisis of 2008 affected levels of individual satisfaction with governments in general and three policy areas in particular; the economy, health services and education. I use data from the European Social Survey (9 rounds, 2002-2018, 14 countries, approx.195000 observations). Running Interrupted Time Series regressions I find that, on aggregate, there was a decrease of satisfaction with the government and the economy immediately after the crisis, but an increase for health and educational services. Longer term, satisfaction gradually increased for all the four indicators examined. In separate regressions for each country, a consistent pattern of behavior emerges. Where the short-term effect on satisfaction was negative, the long-term effect was positive, and vice versa. The switch, from short-term negative to long-term positive effect, could be attributed to the successful efforts of governments to correct the immediate adverse effects of the crisis. On the contrary, some individuals seeing the problems other countries faced, applauded their own government’s short term performance in handling the crisis. With the passing of time however, they gradually became more critical. The COVID-19 pandemic has forced governments to implement policies reviving the economy and improving services in health and the education sectors, amongst others. Results of this study may be used when measuring and evaluating the effects of the current pandemic.

Public Opinion on European Health Policy, Lessons from the COVID-19 Pandemic

“…The coronavirus crisis is still present in our lives, not knowing its trend in the future, and the repercussions on the population will be felt for years from now [30]. The measures imposed by governments to fight the pandemic, and the fear of illness, led to anxiety and mental health degradation amongst people [25].…”

“…Other factors influencing the opinion on health policy are: trust concerning health policy [30], satisfaction with implemented health policy [67,68], and the health crisis impact over their income and lives [69].…”

‘People first’ responses to an externality

“…Asamoah et al defined exogeneous shocks as anything not determined by individual firms, including dozens of economic indicators clearly emerging within the economy [2]. Venetoklis tread a middle ground, noting that the financial crisis of 2008 and COVID-19 were both exogenous events with global impacts, but endogenous to the United IOP Publishing doi:10.1088/1755-1315/1101/3/032006 2 States and China, respectively [3]. For the purposes of this study, Asamoah et al's working definition of exogeneous shocks was adopted and the term 'externalities' used since this is not an economic or policy study, but instead explores events from a firm-centric perspective along with the characteristics that lead to exemplary performance.…”

COVID-19: average time from infection to death in Poland, USA, India and Germany

“…There are many valuable works that deal with the social and economic consequences of the pandemic. Sotis (2021) and Venetoklis (2021) write about the dramatic consequences for the entire world in the form of a decline in GDP, an increase in unemployment, poverty and exclusion. Pileggi et al (2021) also lists such factors having a global impact as the impact on health, the environment and human rights.…”