COVID-19 and public-sector capacity by Mariana Mazzucato and Rainer Kattel published by UCL (2020).
“The paper argues that to govern a pandemic, governments require dynamic capabilities and capacity — too often missing. These include capacity to adapt and learn; capacity to align public services and citizen needs; capacity to govern resilient production systems; and capacity to govern data and digital platforms.
The COVID-19 pandemic presents a massive challenge to governments world-wide — from the provision of income support to citizens and aid to struggling companies to the strengthening of frontline health services. It also requires an unprecedented level of collaboration between nations — from the race for a vaccine to learning how to test and trace. One of the biggest lessons is that state capacity to manage a crisis of this proportion is dependent on the cumulative investments that a state has made on its ability to govern, do and manage. While the crisis is serious for all, it is especially a challenge for countries that have ignored those needed investments in what we can call the ‘dynamic capabilities of the public sector’ (Kattel and Mazzucato 2018).
In the pre-COVID-19 world, governments were increasingly turning their attention to how to tackle ‘grand challenges’ or ‘wicked issues’ such as climate change, demographic challenges, and the promotion of health and wellbeing (Mazzucato 2018b, c). Behind these challenges lie the difficulties of generating sustainable and inclusive growth. Policy-makers increasingly dedicated their attentions to not only the rate of economic growth, but also its direction (Mazzucato and Perez 2015). Tackling grand challenges requires revitalizing private and public investment, innovation and collaboration. It is not about more state or less state, but a different type of state: one that is able to act as an investor of first resort, catalysing new types of growth, and in so doing crowd in private-sector investment and innovation — these are in essence functions about expectations about future growth areas. This requires a new form of collaboration between state and business, and is more about picking the willing than picking winners (Mazzucato 2013)…”
