Uneven infection and government capacity: evidence from Shanghai lockdown

In April, 2022 the government of Shanghai initiated a severe lockdown in which the city's 25 million residents were required to remain in their apartment buildings for 2 months. During the lockdown, sub-district ('Jiedao') governments were responsible for implementing COVID policies and allocating basic goods to the residents within their local administrative boundaries. This paper documents a strong negative correlation between new COVID-19 infections and the distance to the sub-district boundaries. Such correlation is intensified when the government expenditures and goods accessibility are low. We argue that this pattern results from insufficient local government capacity to serve the entire sub-district; individuals near the boundary may evade regulations and seek private connections to obtain goods or services, thereby increasing their risk of being infected. Our results provide insight into government management in the pandemic context and offer new evidence that geography affects the implementation of government policy even at small local levels.