The COVID-19 Information Gap

The coronavirus pandemic is largely the result of an information problem. If we identified everyone who was infected, it would be easier to prevent viral transmission. Unfortunately, Germany has failed to prioritise the one measure that could close the information gap: testing.

Two aspects of an epidemic are especially consequential from an economic standpoint. The first is its external effects. These arise because people do not fully consider the effects of their personal behaviour on others and the overall healthcare system, and hence do not do enough to prevent viral transmission. In response, government must introduce safety protocols such as lockdowns. The other aspect is information: the better we can identify the infected, the easier is it to stop the spread of the disease. Tests and vaccine verification are two useful tools for that purpose.

According to Our World in Data, a popular online site for information on large global problems supported by researchers at the University of Oxford, Germany – alongside South Korea, Vietnam and New Zealand – has done a fairly good job managing the coronavirus crisis. The number of deaths and the extent of the economic effects have been limited, industrial activity has resumed and unemployed has remained stable. In terms of vaccinations, Germany is now progressing along quite well compared with other EU countries. Only when it comes to testing is Germany lagging behind. But this shortcoming could jeopardise its entire success.

Testing is a crucial part of closing the pandemic’s information gap. Although testing is now common in many areas of German society, the government has yet to grant it the importance required to combat the crisis. In the statistics published by Our World in Data, Germany ranks among the bottom-tier countries of Europe. France conducts around twice as many tests per capita as Germany does. The UK does more than four times as many. The relationship of testing to COVID-19 incidence is a more meaningful metric of comparison than the absolute number of infections, which differ from country to country. Countries with higher shares of positive tests have lower levels of testing. The WHO regards a level under five per cent as one indicator that an epidemic in a country is under control. With a current positive test rate of 13 per cent, Germany has some catching up to do. Finland, Portugal and Denmark all have values under five per cent.

The German federal government only recently required companies to offer tests as part of new coronavirus safety standards at the workplace – over the loud protests of the business community. According to the regulations, employees who do not work entirely from home are entitled to receive two tests per week from their employers. Moreover, businesses must allow employees to work remotely “in the absence of reasons to the contrary.” But while work at home is now required whenever feasible, testing is not. And this is where external effects come in. An individual’s reasons for getting a test can vary greatly. Many are not thinking about the emergence of infection hot-spots and the possible spread of infection outside the workplace and the undue burden it could place on the healthcare system. Merely offering tests to employees is not enough. The government will have to introduce additional incentives and may need to make testing mandatory in certain cases. When further developing a test strategy, it is important that the German government also collaborates with social stakeholders. Closing the information gap and addressing external effects takes collective effort.