Distance Examples Short-Run Impact Possible Long-Run Impact
Cultural (includes differences in informal institutions, such as attitudes, values and norms) Attitudes towards individual benefits versus risk created for others in the community.
Attitudes towards public health policies such as social distancing and vaccination.
Differences in attitudes to safety standards likely affect the persistence of the pandemic. Higher infection rates arising in consequence likely deter inward travel from countries with low infection rates. This would affect notably tourism and education sectors. If vaccinations are resisted by a significant share of the population, “herd immunity” becomes difficult to achieve and COVID-19 may persist in those countries, possibly resulting in further travel and trade restrictions.
Students from China (a low infection country in summer 2020) are less likely to go to countries with high infection rates, such as the USA, with long-run impact on human capital formation in both countries.
Administrative (includes differences in regulatory institutions, membership in supranational institutions and bilateral political relationships) National regulation requiring local production of medicines and medical equipment and/or restricting the export of such products [@37899].
Increased competition among countries for access to medical products may increase the importance of political distance and reduce trust in multilateral institutions (like WHO) to provide solutions
Increases in administrative barriers related to medical products reduce trade in such products, and may disrupt existing global value chains [@37899]. Such barriers have arisen, even between countries that would normally be considered politically similar, such as the EU.
Political tensions and lack of intergovernmental trust arguably inhibited information regarding the pandemic, or its reception in other countries, thus slowing down policy responses to the pandemic.
Political affinity, even at sub-national level, in some cases facilitated trade in medical goods.
Trade barriers for medical products may persist, may spill over to other sectors, and trigger retaliatory policies by (former) trade partners. At firm level, more geographically restricted sourcing likely reduces supply chain resilience (Gereffi, 2020) but may also accelerate the adoption of new technologies such as robotics or artificial intelligence.
As bilateral agreements become more important relative to multilateral agreements, trust and familiarity with the partner country’s political system becomes more important, making political distance more important. Location decisions for foreign investors become more complex.
Geographic (includes physical distance and infrastructure facilitating movement of goods and people, such as ports and airports) Restrictions on travel and movement of people limit international transactions based on face to face interactions. Restrictions on travel immediately affected tourism and education related travel, but also trade in goods depending on supplementary services. In contrast, digital services grew, often as a substitute to other forms. Many travel barriers are likely temporary, but lasting effects likely include increased familiarity with digital technologies that can substitute for travel, and reduced numbers of international students.
Economic (includes key economic variables such as level of development, size of the economy (GDP), and income distribution). The economic impact of the pandemic varies across countries in terms of, e.g., depth of the recession and increase of inequality. The recession reduces GDP and trade, with deeper declines in countries with prolonged spread of COVID-19. While some argue that the least developed economies will be the most strongly impacted, the relatively fast response of China and the relatively slow response in the US suggests the issue is more complex. The differential economic impact is likely to have a lasting effect and may even widen as some countries, possibly the poorest, will be slower to recover and will be disadvantaged in accessing vaccines if and when they become available [@37898].
As economic distance changes, perhaps rapidly, location decisions become more complex. Strength of health systems becomes an important factor.