The human tragedy of the unfolding Covid-19 pandemic in India is beyond comprehension. The scars would last much longer not only for families but for society as a whole well after the pandemic is officially declared over, whenever that may be.
In post-pandemic India, there would be one crucial societal dimension that would change for the foreseeable future – the level of trust. The Cambridge dictionary defines trust as the ‘firm belief in the reliability, truth, or ability of someone or something’. Trust is an important ingredient that makes a personal relationship, a business or a government successful.
Trust has a peculiar feature – it is difficult to earn, easy to lose and tough to regain. It is, therefore, no surprise that earning customer trust has been central to the business strategies of many successful corporates. The erosion of trust leads to disengagement with the brand and eventual downfall. What is true for a corporate is true for interpersonal relations and public institutions as well.
Citizens’ trust level set to change
We are likely to see a rise in interpersonal trust in the post-Covid era. Historically, studies have found a high level of trust in neighbours in India, given that neighbours tend to be from the same caste. During the Covid tragedy, irrespective of social group identity, the outpouring of voluntary civic help to locate a hospital bed or oxygen supply via word of mouth or social media, cooking and delivering food for the affected families has been tremendous. These countless selfless acts are likely to stay in memory and reflect in higher personal trust levels. The same would be the case for the empathy and trust for India’s healthcare and related staff.
In contrast, Indians are likely to report erosion of citizens’ trust in public institutions and political leaders. As stated in OECD’s 2017 report, there are two key drivers of trust in public institutions: competence and values. Competence is defined as operational efficiency, capacity and judgement to deliver on a given mandate. Two critical dimensions of a competent government are the speed of responsiveness and reliability. Values are the underlying intentions and principles that guide actions and behaviours. Further, citizens’ perception of fairness and transparency in the process, as much as in outcome, is a critical dimension of trust.
With their handling of the ongoing Covid-19 pandemic, public institutions and governments, irrespective of political parties, have failed in terms of competence, barring some exceptions. This is especially critical since the provision of basic goods and services, such as crisis management and basic healthcare, is the main reason that justifies the existence of public institutions.
Policy inconsistency, one after another
We imposed lockdowns and put limits on the number of people that are allowed to attend private functions. At the same time, public institutions allowed political rallies and religious congregations of mass scale to go on.
In the case of vaccination, we know from the previous work that informational constraints play an important role in the household decision to seek vaccination and households find it difficult to establish the efficacy of vaccination through empirical verification. But India’s public policy over the past year has done little to convince people that vaccination is the cornerstone of bringing the pandemic under control.
Further, despite a year’s notice, we agreed neither on the price and procurement of vaccines with the manufacturers nor on their distribution plans. But, despite a massive shortage of vaccines, it has been announced that all citizens above the age of 18 years are entitled to vaccination from 1 May. A loss of policy credibility and institutional trust is inevitable here. The entire focus right now should be on increasing the supply of vaccines through innovative ways, including considering ‘patent buyouts’, as suggested by Nobel Prize-winning economist Michael Kremer in his famous 1998 paper.
A case for free-for-all Covid-19 vaccine
Haggling over prices is common in a marketplace and has existed for centuries. That is what allows sellers to price discriminate and maximise profits, and buyers to negotiate a price that is in line with their assessment of utility they derive from the product. When the prices are fixed by the seller, we decide as a buyer if the price is worth paying for.
A vaccine, however, is not a private good. It is not a good that can be allowed not to be consumed by some if their estimation of utility out of it is lower than the price. In theory, it is a pure public good with large positive externalities. By taking a vaccine, a person not only lowers the risk to herself but also reduces the chances of spreading the virus/disease to others. A vaccine should thus be available for all and free.
Unfortunately, given the shortage, the Covid-19 vaccine does not fit into the theoretical definition of a public good at present – giving a vaccine to one person excludes its availability to someone else. Also, some of its supply is sold at a price that may result in some people opting out of vaccination, and thus continuing to pose a higher risk to the society in terms of spreading the virus.
Despite the shortage, however, the Covid-19 vaccine should still be free at the point of delivery at both government and private hospitals. All those who are most vulnerable must first receive it free, followed by a single dose to all until the shortage persists rather than opening up the vaccination for all adults. By dividing the already low supply into the free and the priced, the policy discriminates between those who can afford it and those who can’t. Some may be able to take both the doses and some not a single one.
If the public exchequer wishes to garner funds, it would be better to start a vaccination fund and appeal to people and businesses to contribute, which is bound to generate a reasonable amount. In any case, the social and economic opportunity cost of non-vaccination is so high, the government budgets elsewhere must be curtailed to fund the vaccination drive. A perceived inability to provide a free-for-all vaccine does not bode well for public trust.
Trust in public institutions is built if people receive timely help when they are vulnerable. During exceptional circumstances, people need external oxygen assistance. If the healthcare system is unable to help when needed, the breach of trust could be high and long-lasting, irrespective of whether the system is to be blamed for the shortage or not in the face of a massive and sudden increase in demand.
Overall, concerted efforts need to be proactively taken to restore public trust in India’s institutions. That means, first and foremost, sorting out the supply, the pricing and the distribution of the Covid-19 vaccines and communicating it with clarity to the public.
Vidya Mahambare is Professor of Economics, Great Lakes Institute of Management. Views are personal.
(Edited by Prashant Dixit)
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