Financialisation, working conditions and contagion dynamics in developing and emerging economies

By Giorgos Galanis, Giorgos Gouzoulis

PKES Working Paper 2018

August 2020

COVID-19 has been having a severe impact on most aspects of economic and social reality across the globe. However, these effects have been unequally distributed with vulnerable people being affected the most (Ahmed et al., 2020) and the impact is magnified in developing and emerging economies (DEEs). This paper analyses the possible effects of financialisation on the contagion dynamics of COVID-19 in Developing and Emerging Economies (DEEs). Drawing on the growing political economy literature on the effects of financialisation on inequalities and working conditions, we argue that financialisation has influenced a number of social conditions, which affect the reproduction rate of COVID-19 through limiting the physical distancing possibilities. Using available epidemiological data, we provide a preliminary empirical assessment, which suggests that economies that are more financialised and have weaker labour market institutions experienced substantially longer COVID-19 waves. Interestingly, we demonstrate that the worst hit cases were the most financialised DEEs.

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