The macroeconomic implications of disease pandemics in developing countries: An application of Covid-19 in Uganda

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Abstract

This study examines the economy-wide implications of infectious diseases, taking the case of Covid-19 pandemic in Uganda. Covid-19 containment measures generated social and economic consequences. We employ a recursive dynamic computable general equilibrium model to evaluate the implications on the economy. We design scenarios to mimic the containment policies via labour supply, labour productivity, government healthcare spending and remittance inflows. Results indicate that growth in
sector output declines when compared to the no-Covid-19 baseline. However, export growth rates are predicted to be higher. Increased government healthcare spending induces expansion in the healthcare output but the sectors that produce the intermediate inputs for healthcare production do not grow in
tandem. Household welfare declines and the loss is largest among the top quintile households in both rural and urban areas. Policymakers should revisit Uganda’s industrial policy towards domestic production of intermediate inputs to critical domestic sectors such as healthcare. Also, accelerate rural infrastructure development particularly the road network, to facilitate an integrated rural economy induced by the shift in labour and enterprise towards rural areas.
Original languageEnglish
Article number3727
Pages (from-to)1254-1286
Number of pages33
JournalJournal of International Development
Volume35
Issue number6
Early online date7 Dec 2022
DOIs
Publication statusPublished - Aug 2023

Bibliographical note

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.© 2022 The Author. Journal of International Development published by John Wiley & Sons Ltd.

Keywords

  • computable general equilibrium modelling
  • Covid-19
  • Developing countries
  • Economic growth
  • Infectious diseases
  • Labour shocks
  • Uganda

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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