Fearonomics and the Role of Nigeria's Private Sector in the Nigerian Ebola Response

Background: Outbreaks of infectious diseases such as Ebola have dramatic economic impacts on affected nations due to significant direct costs and indirect costs, as well as increased expenditure by the government to meet the health and security crisis. Despite its dense population, Nigeria was able to contain the outbreak swiftly and was declared Ebola free on 13th October 2014. Although Nigeria’s Ebola containment success was multifaceted, the private sector played a key role in Nigeria’s fight against Ebola. An epidemic of a disease like Ebola, not only consumes health resources but also detrimentally disrupts trade and travel to impact both public and private sector resulting in the ‘fearonomic’ effect of the contagion. In this thesis, I have defined ‘fearonomics’ or the ‘fearonomic effects’ of a disease as the intangible and intangible economic effects of both informed and misinformed aversion behavior exhibited by individuals, organizations, or countries during an outbreak. During an infectious disease outbreak, there is a significant potential for public-private sector collaborations that can help offset some of the government’s cost of controlling the epidemic.

Objective: The main objective of this study is to understand the ‘fearonomics’ of Ebola in Nigeria and to evaluate the role of the key private sector stakeholders in Nigeria’s Ebola response.

Methods: This retrospective qualitative study was conducted in Nigeria and utilizes grounded theory to look across different economic sectors in Nigeria to understand the impact of Ebola on Nigeria’s private sector and how it dealt with the various challenges posed by the disease and its ‘fearonomic effects'.

Results: Due to swift containment of Ebola in Nigeria, the economic impact of the disease was limited especially in comparison to the other Ebola-infected countries such as Liberia, Sierra Leone, and Guinea. However, the 2014 Ebola outbreak had more than a just direct impact on the country’s economy and despite the swift containment, no economic sector was immune to the disease’s fearonomic impact. The potential scale of the fearonomic impact of a disease like Ebola was one of the key motivators for the private sector engagement in the Ebola response.

The private sector in Nigeria played an essential role in facilitating the country’s response to Ebola. The private sector not only provided in-cash donations but significant in-kind support to both the Federal and State governments during the outbreak. Swift establishment of an Ebola Emergency Operation Centre (EEOC) was essential to the country’s response and was greatly facilitated by the private sector, showcasing the crucial role of private sector in the initial phase of an outbreak. The private sector contributed to Nigeria’s fight against Ebola not only by donating material assets but by continuing operations and partaking in knowledge sharing and advocacy. Some sector such as the private health sector, telecom sector, financial sector, oil and gas sector played a unique role in orchestrating the Nigerian Ebola response and were among the first movers during the outbreak.

This paper utilizes the lessons from Nigeria’s containment of Ebola to highlight the potential of public-private partnerships in preparedness, response, and recovery during an outbreak.

Institutional Persistence in Eastern Europe: Economic and Political Legacies of Empires and Communism

This dissertation seeks to advance our understanding of the roles that institutions play in economic development. How do institutions evolve? What mechanisms are responsible for their persistence? What effects do they have on economic development?

I address these questions using historical and contemporary data from Eastern Europe and Russia. This area is relatively understudied by development economists. It also has a very interesting history. For one thing, for several centuries it was divided between different empires. For another, it experienced wars and socialism in the 20th century. I use some of these exogenous shocks as quasi-natural social experiments to study the institutional transformations and its effects on economic development both in the short and long run.

This first chapter explores whether economic, social, and political institutions vary in their resistance to policies designed to remove them. The empirical context for the analysis is Romania from 1690 to the 2000s. Romania represents an excellent laboratory for studying the persistence of different types of historical institutional legacies. In the 18th and 19th centuries, Romania was split between the Habsburg and Ottoman Empires, where political and economic institutions differed. The Habsburgs imposed less extractive institutions relative to the Ottomans: stronger rule of law, a more stable and predictable state, a more developed civil society, and less corruption. In the 20th century, the Romanian Communist regime tried deliberately to homogenize the country along all relevant dimensions. It was only partially successful. Using a regression discontinuity design, I document the persistence of economic outcomes, social capital, and political attitudes. First, I document remarkable convergence in urbanization, education, unemployment, and income between the two former empires. Second, regarding social capital, no significant differences in organizational membership, trust in bureaucracy, and corruption persist today. Finally, even though the Communists tried to change all political attitudes, significant discontinuities exist in current voting behavior at the former Habsburg-Ottoman border. Using data from the parliamentary elections of 1996-2008, I find that former Habsburg rule decreases by around 6 percentage points the vote share of the major post-Communist left party and increases by around 2 and 5 percentage points the vote shares of the main anti-Communist and liberal parties, respectively.

The second chapter investigates the effects of Stalin’s mass deportations on distrust in central authority. Four deported ethnic groups were not rehabilitated after Stalin’s death; they remained in permanent exile until the disintegration of the Soviet Union. This allows one to distinguish between the effects of the groups that returned to their homelands and those of the groups that were not allowed to return. Using regional data from the 1991 referendum on the future of the Soviet Union, I find that deportations have a negative interim effect on trust in central authority in both the regions of destination and those of origin. The effect is stronger for ethnic groups that remained in permanent exile in the destination regions. Using data from the Life in Transition Survey, the chapter also documents a long-term effect of deportations in the destination regions.

The third chapter studies the short-term effect of Russian colonization of Central Asia on economic development. I use data on the regions of origin of Russian settlers and push factors to construct an instrument for Russian migration to Central Asia. This instrument allows me to interpret the outcomes causally. The main finding is that the massive influx of Russians into the region during the 1897-1926 period had a significant positive effect on indigenous literacy. The effect is stronger for men and in rural areas. Evidently, interactions between natives and Russians through the paid labor market was an important mechanism of human capital transmission in the context of colonization.

The findings of these chapters provide additional evidence that history and institutions do matter for economic development. Moreover, the dissertation also illuminates the relative persistence of institutions. In particular, political and social capital legacies of institutions might outlast economic legacies. I find that most economic differences between the former empires in Romania have disappeared. By the same token, there are significant discontinuities in political outcomes. People in former Habsburg Romania provide greater support for liberalization, privatization, and market economy, whereas voters in Ottoman Romania vote more for redistribution and government control over the economy.

In the former Soviet Union, Stalin’s deportations during World War II have a long-term negative effect on social capital. Today’s residents of the destination regions of deportations show significantly lower levels of trust in central authority. This is despite the fact that the Communist regime tried to eliminate any source of opposition and used propaganda to homogenize people’s political and social attitudes towards the authorities. In Central Asia, the influx of Russian settlers had a positive short-term effect on human capital of indigenous population by the 1920s, which also might have persisted over time.

From a development perspective, these findings stress the importance of institutions for future paths of development. Even if past institutional differences are not apparent for a certain period of time, as was the case with the former Communist countries, they can polarize society later on, hampering economic development in the long run. Different institutions in the past, which do not exist anymore, can thus contribute to current political instability and animosity.