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Sweden eschewed lockdowns. It’s (still) too early to be certain it was wrong.

By Andreas Ortmann - posted Tuesday, 24 November 2020


"We are now seeing rapidly falling cases, we have continuously had healthcare that has been working, there have been free beds at any given time, never any crowding in the hospitals. The failure has of course been the death toll that has been very much related to the long-term care facilities in Sweden. Now that has improved, we see a lot less cases in those facilities".

Tegnell's summary is broadly in line with this history of the Swedish covid-19 response, dated October 31, by a doctor working in the emergency room of one of the big hospitals in Stockholm. Rushworth's earlier blog entry, dated August 4, about how bad the virus really is remains a useful - albeit outdated - read.

Even now, in early November, with cases having increased substantially, Tegnell's approval is high (and actually keeps increasing), currently being above 70 percent.

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To re-iterate, what we see currently is a snapshot at a still early stage of the pandemic, as the currently exploding numbers in the USA and parts of Europe and several other countries (namely Middle and Latin America but also Russia) suggest. To compare death rates at the present stage is hence misleading and unhelpful to the extent that it is meant to inform policy responses. The game is not over til it's over. Which by most accounts is years down the road.

Second, and along a similar line of reasoning, I submit that it is too early to conclude that the economic gains were not worth the pain. For starters I note that the Andersen et al. study often used to argue against the Swedish model is not only from 12 May 2020 but uses data from 11 March to 5 April 2020. It is in my view disingenuous at best to parade data that old in an article published at the end of July 2020, nevermind today. Likewise to build synthetic doppelgangers of Sweden for the second quarter and draw conclusions from it is at best an academic, and in my view severely misleading, exercise.

In September 2020, for example, the retail trade sales volume increased by 3.9 percent in September 2020 compared with the same month a year ago. Retail sales in durables increased by 4.3 percent, while retail sales in consumables (excluding Systembolaget, the state-owned chain of liquor stores) increased by 1.8 percent.

Sweden's economy is set to make a stronger recovery than expected in the middle of the year, with Sweden's GNP at market prices currently expected to shrink by between 3–4 % for 2020, according to the National Institute for Economic Research. That' s up from earlier predictions, a couple of months back of about 5% shrinkage but does not take into account the strong localized restrictions that have been imposed over the last couple of weeks.

Even a 5% shrinkage would be a much better economic outcome than the European Commission predicted in its summer (July) interim forecast, ie. a forecast that - save the model-based scenario analysis in Box 1.1. - did not yet factor in the second (and third) waves that forced almost all European countries into lockdowns of various degrees. The model-based scenario analysis predicted for a second wave an output loss three times that size (slightly above 10% and slightly below 12% relative to pre-pandemic path). Make no mistake about it: any such dramatic output loss will have consequences down the road, last but not least because good public-health outcomes require reasonably well-functioning economies.

Third, Sweden, at this stage, has the considerable advantage of having reached some form of behavioral equilibrium and compliance - Sweden's Civil Contingencies Agency estimated it in July to be well above 80 percent. That was around the same time when Australian media reported that 1 out of 4 in Melbourne that tested positive did not obey stay-at-home-orders. And while there have been vocal people in Sweden opposing Tegnell's strategy (see here for some relevant background), there have not been the kind of regular protests against (lockdown) restrictions that other countries such as Germany have seen. This surely reflects the very European willingness to accept that there are trade-offs between health, educational, economic, and other outcomes (anxiety, loneliness, mental health, suicides) and that the avoidance of covid-19 deaths should not be prioritized over the avoidance of other deaths.

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There are legitimate questions to be asked about the Swedish strategy (e.g., which conflicted role its former state epidemiologist Johan Giesecke played in defining Sweden's public health agency's strategy, how and why the old-age care sector under-performed in Sweden, and why the death rate for ethnic Swedes seems about half of the country's overall death rate).

In the end, it will take years to arrive at better grounded assessments of the different strategies that various countries have adopted. Any such assessment - if creditable - will have to compare health, educational, economic, and other outcomes and will require to weigh the lives lost today and in the future, properly weighted by their age distribution, the damage done to those that do survive encounters with the virus, and the damage that has been done to the millions on JobKeeper and JobSeeker, out of work (e.g., thousands of casuals let go by universities and not eligible for JobKeeper payments), or underemployed, the tens of thousands of livelihoods lost, the millions of superannuation accounts raided, and the educational and professional prospects of the young ones further dimmed. We have not even started to try to understand, for example, what the costs are of the disruptions to education we currently experience in Australia. And we are far from quantifying the mental-health complications that inevitably will eventuate as the pandemic marches on, movement restrictions are maintained to various degrees, and the consequences of opportunities lost during this pandemic become more salient.

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This article was first published on Medium. It is an expanded version of an article published on The Conversation



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About the Author

Andreas Ortmann is Professor of Experimental and Behavioural Economics in the School of Economics, UNSW Business School.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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