The Government Response Stringency Index

Having mentioned yesterday the Oxford Covid-19 Government Response Stringency Index, I was playing around with variants of this chart, tracing the responses of various governments through time.

stringency index

On this variant I’ve included the Anglo countries and most of the countries of western Europe.

It is only one index, and only as good as the presumptions about what mattered of those who put it together, but it is now quite widely used and cited.

In detail of course it is hard to read, but my main interest was in New Zealand relative to where the generality of other western countries were, and you can read the New Zealand line: throughout the “Level 4 lockdown” the compilers of the index judged our restrictions to be the most stringent of any of the countries, although as at the last updates –  and they aren’t updating every country every day – we had dropped a bit below Italy and France.   The Australia line is hard to see individually, but you can see from the listing at the right that as of now it has the third least stringent regime of any of the countries shown.

(Note that some countries –  including Australia and the United States –  are federal systems with differing degrees of restrictions in individual states: I presume the index is capturing some sort of representative degree of restrictiveness.)

Here is the same chart showing New Zealand, Australia and the east Asian advanced countries.

stringency 3

Singapore is, of course, the salutary case.

Those who read my post yesterday will have seen that I reckon it is plausible that GDP will fall by about 25 per cent in the June quarter, similar to the Bank of England expectation for the UK.  I was interested yesterday afternoon to see that the Reserve Bank of Australia is expecting “only” a 10 per cent fall in GDP in the June quarter.   Even our market economists are materially more pessimistic than that for New Zealand.

Now, as everyone recognises, big GDP losses were going to happen whatever governments did.  The data in the US indicate clearly, across states, how much economic activity had already fallen away before state or city governments imposed severe restrictions.  We saw signs of that here too – I recall going to Auckland a few days before the move to “Level 4” was announced and talking to taxi drivers who’d waited six hours for a single ride.    But, equally, there is little doubt that the extent of the restrictions has affected the extent of the loss of economic activity now (it is an open question whether there are large trade-offs re future losses of activity: only time and lots of research will tell fairly conclusively).   New Zealand’s near-term economic loss looks likely to have been larger than most –  a lot larger than Australia’s, at least if the RBA is to be taken seriously.

Perhaps some will think of this as just a perspective of hindsight.  But there is reason to think it shouldn’t be seen that way.

For example, my interest was piqued when I saw this this morning

I haven’t yet read the Ministry of Health paper referred to  (the pro-active release documents are all here), but I did watch the interview and James Shaw didn’t dispute that it was an accurate account of the Ministry’s advice, apparently on 21 March.

And one can add to the mix the paper Ian Harrison, of Tailrisk Economics, wrote several weeks ago casting doubt on the modelling that the Prime Minister has cited in defence of her government’s stance.

At very least, it should lead to some quite stringent questioning for the Prime Minister and other senior Cabinet ministers about the robustness of their advice and their decisionmaking.  I will look forward to tracking down, among the papers released, the cost-benefit work (formal or informal) that The Treasury and/or the Ministry of Health provided Cabinet before the decisions were made.   Perhaps if these papers had been released contemporaneously –  given that magnitude of the decisions involved –  not six weeks later, these questions might have been posed much earlier, when doing so might have made a difference to outcomes.  Of course, no one can know counterfactuals with any certainty –  partly because no one can also know quite what difference the marginal interventions themselves made – but that shouldn’t stop the scrutiny and challenge, even if it only highlights other failures in our systems that perhaps might have made such intense restrictions, such large near-term economic losses, more necessary or justifiable.

24 thoughts on “The Government Response Stringency Index

  1. I wrote to the Department of Prime Minister and Cabinet asking for the modeling that the PM and Cabinet they used to make the decision to extend Level 4 Lockdown past 20 April.

    The DPMC wrote back and told me they would have to refer me to the PM to answer the question directly.

    It was quite surprising that apparently no one except the PM herself could answer my question – particularly because I asked what Cabinet considered as well as the PM herself.

    https://fyi.org.nz/request/12757-modeling-informing-the-decision-to-extend-lockdown

    Liked by 1 person

    • It is probably a technically fair response. DPMC (a public service dept) will know what papers are on the formal Cabinet agenda, but not what informal or direct channels the PM or other ministers may have acquired research/modelling by.

      But, of course, a proactively open govt would have released all that material itself at the time.

      Liked by 1 person

    • Why not ask her friends in the UK?
      Isn’t that what tipped the scales for her?!
      Unfortunately, i think its probably as deep as many of them think.
      The whole lockdown response seemed more of an emotional response than one made with good domestic sound evidence.
      Shutting down our borders to countries with the issue i can go with. That’s logical.
      Locking down an entire country of 5million healthy people to their homes and imploding our entire economy based on just some ridiculous modelling which was proven to be utterly ridiculous thus needing revision after revision was the most irrational thing ive witnessed in my 49 years.
      What a knee jerk reactionary fearful society we have become. And if a majority actually feel such reactions are worthy of praise then god help us.

      Liked by 3 people

  2. So level IV wasn’t science-based, after following public health professional advice. A pure political decision. I wonder how popular the lockdown would have been if these papers were released at the time of the decision?

    Liked by 1 person

    • We went from level 2 to level 4 in 2 days. It was clear at the very start that the Labour government panicked after watching too many YouTube videos. There was no science nor facts. It is a typical Jacinda Ardern emotion based decision making process that we have seen since time and time again.

      Liked by 1 person

  3. Michael, in case you missed it – this is an interesting snapshot;

    https://www.stuff.co.nz/business/industries/121379239/coronavirus-70-job-losses-and-more-than-4-million-owed-by-13-businesses-that-fell-victim-to-covid19-during-lockdown

    Looking at these business types, I suspect NZ has been over-serviced in many of those business areas for quite some time. More businesses than anyone can guess will be impacted by the int’l tourism downturn;

    Click to access nz-tourism-forecasts-2018-2024-report.pdf

    Some serious rabbit will need to be pulled out of the hat come Budget day.

    Like

      • Days after the lockdown began on March 25, the All of Government Group advised ministers leading the Covid-19 response there were nearly 400,000 foreign nationals temporarily in New Zealand. It estimated just over half of those were workers – about two thirds on working visas and the rest working holidays.

        As of March 30, there were 383,000 temporary student, visitor, and work visa holders in New Zealand. Many were “anxious” to return home and warned demands to support them could increase if they were forced to remain in NZ. The vast majority were temporary visa holders here on a more settled basis.

        “There is a far larger group of temporary migrants in NZ here on a more settled basis, including students, temporary migrant workers, and partners/dependents of workers here on visitor visas”. “They make up the bulk of the 383,000 visa holders. “They had planned to remain in New Zealand for an extended period of months or years.

        NB:
        “Access to accommodation, insurance and funding for living costs was a condition of their visas being granted and entry to New Zealand”

        https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12330690

        Liked by 2 people

  4. I think they had such high stringency because it polled well, nothing more complicated than that. Sadly there is nothing new in this.

    Liked by 1 person

  5. I love distressed assets, but nothing looks cheap when you can’t make money off it.

    If you buy 10,000L stainless fermenters from a failed craft brewery, you too will struggle to make it work as well!

    If you buy an engineering firm, you will also see less and less work in NZ, what value does old equipment and an unaffordable lease have?

    If you buy a property your tenants will only be able to keep going if they have 50% rent reduction for the foreseeable future.

    IT startups with no revenue are cash sink holes, no assets there.

    I myself looked at tourism and seriously considered it, but now? Goodwill has zero value at the moment.

    Machinery companies are closing down with $10 reserve auctions…
    https://www.number8.bid/auction/unreserved-macdonald-machinery-woodworking-and-engineering-equipment-dealer-closure-online-auction-174/bidgallery/

    This is an incredibly ugly situation, this will not be a wealth transfer to younger NZers, we are about to see wealth destruction.

    On a positive note my daughters have learned to make stuff, apart from home made bread which is a favourite these are very good

    https://www.twopeasandtheirpod.com/oreo-balls/

    I still firmly believe that technology and R & D is the only way out of this mess…. Microsoft opening a data centre is good news, Amazon and Google will be forced to follow…

    Good time to work for Datacom.

    Liked by 2 people

    • Checked on house valuations yesterday on homes.co.nz. The values are all up. Checked on my latest rents. They are all paid up to date. Checked on the sharemarkets NZX. The market is trending up. I have plans for investing perhaps as much as $400k directly. $20k already went to buy, Kathmandu, Fletcher building, Plexsure tech, Sky City and offered but did not get much of Scott Technologies.

      Like

  6. Apologies for ‘spamming’ on the topic, but I found another couple of articles by another software engineer reinforcing the one I linked to above

    https://lockdownsceptics.org/second-analysis-of-fergusons-model/
    https://lockdownsceptics.org/code-review-of-fergusons-model/ (worth reading even if you’ve read the updated version linked above)

    An absolutely key point from the first article is that the reinsurance industry have their own pandemic models:
    1. They more accurate than the Imperial College model, but they still don’t employ them as they don’t consider them accurate/predictive enough (ie reinsurers have concrete financial risks to be realised by inaccurate modelling. Academia and MPs… not so much)
    2. For critical decision making the reinsurance industry creates two separate internal models + engages an external model as a control. Y’know.. for control and accuracy
    3. The re-insurance industry was never consulted at large around Covid response, despite having strong alternate off-the-shelf pandemic models that could be used as inputs and controls

    A secondary point worth noting strongly is that Imperial College has refused to release the original model, and Microsoft engineers are frantically rewriting it before release (and the new versions are producing new projections off the same data as they’re released..). Can you imagine how appallingly bad the original model must have been written? And yet huge decisions were made off the back of it – it wasn’t the model relied upon in NZ, but it almost certainly served as a scene-setter for government thinking internationally.

    Liked by 1 person

    • Modelling is always wrong, sometimes it’s useful.
      The PM was talking about tens of (80?) thousands of possible/probable deaths as the motivation for going into lock-down. Wasn’t that based on modelling from Otago but using the Imperial college programme developed by disgraced Professor Pantsdown?
      It’s very foolish to believe that modelling complex chaos systems with unquantifiable, unweightable, unknown, unpredictable inputs and feedbacks will produce accurate predictions. Try it on the share market. Or the “belief” in anthropogenic climate change; fuelled by modelling that can’t even predict the past.
      Modelling might look and sound like science, it even gets called “the Science”.
      It’s not.

      Liked by 2 people

      • It’s very foolish to believe that modelling complex chaos systems with unquantifiable, unweightable, unknown, unpredictable inputs and feedbacks will produce accurate predictions.
        ————————————

        Models do not produce predictions, they produce possible (but not necessarily likely) scenarios, which should be treated with great caution. There seem to be an unexplained but widespread tendency to treat modelling results as FACTS rather than speculations. And then, very far reaching political decisions are made, based purely on these speculative “facts” and without weighing all “pros” and “cons” or so it appears.

        Liked by 3 people

  7. The gagging order is very telling and appears to demonstrate an utter distain for transparent democratic checks & balances for the benefit of a entire public that now bares the consequences of these decisions for maybe a decade

    Liked by 4 people

  8. This government have created an economic nightmare for many.
    They don’t have a clue and it shows. They are now playing pick up sticks after throwing the game in the oven thinking it was a great idea

    Like

  9. Anyone else notice how much smarter Jacinda has looked while not being surrounded by her normal Cabinet Ministers, Level 3/4 has been great for Labour.

    Smartest thing National could do here is a curve ball new leader… then all best are off.

    Like

    • Not too sure why Kiwis generally give her the thumbs up. All I see coming from her is lie after lie after lie.

      It is never a lie when it is aspirational. Kiwibuild.

      It is never a failure to perform when it gives hope. Light Rail.

      Our government is transparent. There is nothing to see means transparent. Coalition agreement with NZFirst

      We need an independent review. Independent means we pay you to write what we want to hear. $100 million spent on working groups. Outcome briefs provided before the research.

      Liked by 1 person

  10. This is an unscientific observation based on watching Ardern’s body language during her announcements in March. I think the sudden escalation to level 4 was a both a political and an emotional act on her part. For weeks we had been held hostage to loosely controlled borders with no pro-active testing of international arrivals or mandatory quarantine as preparations were made for the memorial event in Christchurch on 15 March, to which international visitors and media had apparently been invited. That event was cancelled, suddenly, the day before, on 14 March to the obvious disappointment of Ardern who only a few days prior had declared it had the all clear from health officials. She also announced that cruise ship visits were to be banned (ironically while the Ruby Princess was in Wellington and then Napier) and there was an indication I seem to recall our borders would be closing. On 21 March we were introduced to the levels system. On 22 March a petition urging firm action by the government gathered 120,000 signatures in 24 hours and eminent commentators like Sir Peter Gluckman were also weighing in. Having been told on 21 March we were already on level 2, to remain on level 2 would not have demonstrated a proportionate response to the rapidly mounting sense of concern among the public. There was a palpable sense of relief when the government announced on 23 March a rapid acceleration to level 4, effective from 26 March. However while many wanted the borders to be sealed and large gatherings to be restricted, few would have expected their local butcher or fish shop to be shut down. Last Friday’s document dump indicates these more draconian and senseless restrictions were not the recommendation of officials but were the work of Cabinet, perhaps Ardern herself given her (justifiably) low regard for most of her Ministers’ contributions on the pandemic response. Do I detect an element of spite against officials and the public in going so needlessly hard?

    Liked by 1 person

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