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Vaccine Nationalism

UN Secretary-General Antonio Guterres warned the public about “vaccine nationalism” last year. He declared that this is a major threat to our war against the pandemic. As the time passes, the unequal distribution of vaccines justifies him.

Vaccine nationalism is highly spectacular for developed countries. Israel is planning to apply the fourth dose while the lower income countries are struggling to reach the first dose. Only the 9 percent of the population in lower income countries could reach a first dose.

Developed countries have ordered the half of the 2021 vaccine supply in 2020. These pre-orders are known as “Advanced Market Commitments (AMC)”. Developed countries spent considerably large amount of money for developing and manufacturing of the vaccine and thereby have priority to early access to them.

Troubles in accessing to the vaccines are not new. Patents and license fees are considered to be an obstacle to the vast production of the vaccines in terms of plausible expenses. For instance, although HIV vaccine has relatively inexpensive production technology, vast production of the vaccine could not be possible due to the license fees. Millions had died in the late 90s as they could not reach HIV vaccine.

Is Vaccine a Global Public Good or Immunization Creates Externality?

UN Secretary have also announced that vaccines should have been treated as a “global public good”. It sounds good but it is far from economic reality. The logic behind the public good is something different.

In his seminal work Samuelson (1954), defined public goods properly. Public goods have two important properties: They should be non-excludable and non-rival. Non-rivalry means that consumption of one could not prevent others to consume. Public goods are also non-excludable- which means that you cannot exclude the non-payers. Because of non-excludability, free rider problem emerges and ends with underproduction- less than socially optimal. From this perspective, vaccine could not be regarded as a global public good. However, the know-how regarding the vaccine production technology (R&D) could.

Vaccine is not a global public good but immunization with the vaccine creates externality- again cause a production below the socially optimum. But this is also global in nature. Dealing with traditional externalities in the borders of the country is easy: Governments take corrective actions. But dealing with cross-border externalities as a lack of global government necessitates collective action.

COVAX Initiative

COVAX is an example of collective action. It is one of the pillars of the Covid-19 Tools Accelerator Alliance. COVAX’s role is related with the vaccines. This initiative is coordinated by GAVI (Vaccine Alliance), The Coalition for Epidemic Preparedness Innovation (CEPI) and WHO. COVAX is supporting R&D, development and manufacturing of the vaccines. More than 180 countries have supported the initiative. COVAX AMC -a branch of COVAX- specifically deals with the 92 middle and low-income countries that could not be able to afford the vaccines. This branch of COVAX simply aims to distribute the vaccines to the less developed regions such as Africa. COVAX AMC also financed through Official Development Assistance and private donations.

COVAX is a good starting point to deal with externalities created by either vaccine R&D or immunization through vaccination. But it is not enough. This initiative has also reserved vaccines to distribute to the low income countries. COVAX aims to donate doses in order to vaccinate 30 percent of the population in low-income countries. Covax had planning to reach 2 billion doses but could only be able to reach 1 billion doses in the beginning of January 2022.

This pandemic probably will not be the last one. To be prepared, governments should work collectively to deal with externalities- the externalities that save many lives. Furthermore, global reach of the vaccine is not only a moral issue, it is also a scientific one. In order to end Covid -19 pandemic, global immunization should be ensured. Thus this initiative should widely be supported. In this setting, private foundations may cooperate with COVAX in order to support R&D of the vaccines efficiently. In a nutshell, global externalities need global corrective actions…

Assoc. Prof. Derya HEKİM