NZ’s toolkit for the Covid-19 response limited by our institutions

The "spirit" in this case is our political leadership, national cohesion and commitment to action. Not just the communication skills of our prime minister, but also the remarkable crossparty co-operation that made for a united front going into lockdown.

The public sacrifice called for by the level 4 lockdown has succeeded in avoiding a healthcare disaster. The Government's massive injection of financial support through the wage subsidy scheme has cushioned the economic and social harm of our particularly stringent lockdown. But the fallout will still be devastating.

We will never know what would have happened had the response been different, had we allowed more businesses to operate, perhaps kept the schools open.

Economists, public health experts and epidemiologists can argue about whether it would have been better to take this or that alternative path. Rather than getting stuck on this argument, we should recognise that many potentially good pathways were simply not open to New Zealand.

This is where we get to the "flesh is weak" part. New Zealand's state sector institutions provide a limited toolkit for policymakers. Institutions in this sense are the political, administrative and legal systems that shape the way policy is implemented.

Researchers have long known that institutions matter for economic growth and development. The same policy can fail or succeed depending on institutional context.

Could New Zealand have adopted policy responses to the pandemic similar to those of Taiwan, Hong Kong, South Korea, Vietnam or Singapore? All these places have implemented policy responses that have been highly effective (notwithstanding Singapore's recent surge concentrated among migrant workers) without requiring the kind of economic shutdown that we have seen.

My colleague Frank Siedlok and I have been tracking Taiwan's response to the virus. Taiwan imposed very early travel restrictions, comprehensive tracing, digital linking of each person's travel information to their national health information card, strict quarantine and near universal wearing of face masks.

Taiwan's government mobilised industry to commit to massively ramping up production of masks and nationalised the distribution of masks that so every family can access them at low cost. These measures have allowed Taiwan to keep cases of Covid-19 at a stable and low level, despite its proximity to China. It also allowed Taiwan to keep its schools open and its economy largely running.

It will suffer the effects of global recession, but it will have a smaller economic contraction because it has been able to keep so much of its domestic economy and society running. Not business as usual, but business and schooling in a carefully calibrated, disciplined way.

We can learn from these East Asian exemplars, but we do not have the institutional architecture to emulate them.

Our state sector administrative machinery is different, as is the organisation and capacity of the public health system and type of links between business and government.

Singapore, South Korea and Taiwan have well-documented institutional capacity in these areas that provided for both fast-response, top-down measures and collective action across business and government. These are the archetypical "developmental states" of East Asia that, despite reconfiguration in recent years have maintained significant developmental ambition and capacity.

New Zealand's state institutions are, by design, quite different. They are judged highly efficient, free of corruption and see New Zealand sit at the top of the World Bank's Ease of Doing Business index.

Thirty years ago, state sector reforms saw us shift the state "from rowing to steering", to become what has been called a "regulatory state". We built a public sector based on contractualism, outsourcing and managerial monitoring of deliverables.

This institutional set-up lacks the machinery to rapidly implement the kinds of policies deployed in Taiwanese-style responses to the pandemic.

We have struggled to get adequate PPE to healthcare workers, let alone distributing it to everyone. Our public health contact tracing capability was inadequate. We did not quarantine all positive cases in separate accommodation and, until recently, we left those arriving in the country to self-isolate largely on trust.

We have seen many fine examples of leadership, intelligence, good will and sheer hard work in our national response to the pandemic. Those involved have probably done pretty much all that was possible, given the tools available.

If we would like to have a broader policy toolkit in future, we will need to think about the institutions behind the policy.