Pandemics and protectionism: evidence from the Spanish flu

The impact of COVID-19 on recent tendencies towards international isolationism has been much speculated on but remains to be seen. We suggest that valuable evidence can be gleaned from the Spanish flu of 1918-20. It is well-known that the world fell into a protectionist spiral following the First World War, but scholars have almost exclusively ignored the impact of the pandemic. We employ a difference-in-differences strategy and find that the flu had a significant impact on trade policy, independent of the war. In our preferred specification, a one standard deviation increase in excess deaths during the outbreak implied 0.022 percentage points higher tariffs subsequently, corresponding to an increase of one third of a standard deviation in tariffs. Health policy should aim to avoid the experience of the interwar period and consider the international macroeconomic impact of measures (not) taken.

Automated summary

Research indicates that the Spanish flu of 1918-20 had a significant impact on trade policy, independent of World War I. An increase in excess deaths during the outbreak led to a subsequent rise in tariffs, suggesting that health policies should avoid repeating the mistakes of the interwar period and consider the international macroeconomic implications of measures taken (or not taken).