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“Black Swans” and Social Institutions

The paper considers the COVID-19 pandemic as a manifestation of an upward trend in various kinds of risks on the path of social development. Promoting the adaptive abilities of socio-economic systems becomes an urgent task. We propose to use the experience of various countries in combating the pandemic to analyze the conditions that help to respond effectively to various unforeseen challenges, which are often referred to as "black swans" in modern literature. We present a brief review of the literature that analyzes the differences between countries, which affect their economic development amidst the COVID-19 pandemic. We prove that, contrary to popular belief, the continued growth of GDP can be combined with relatively low COVID-19 mortality rates. This conclusion is based on data from 30 countries for the year 2020. We note that the share of the service sector in the economy has a significant impact on the dynamics of GDP in the context of the pandemic. We focus on the relationship between changes in GDP in 2020 and institutional circumstances. We find that it is possible to curb the decline in GDP growth rates primarily in those countries where the population trusts the government. The decline in GDP in some countries under consideration occurs against the background of relatively high information and personal freedom that contributes to a decline in the level of trust in the government in the context of the pandemic. The regression analysis confirms that almost half of the differences between countries in GDP dynamics in 2020 are negatively related to two factors: COVID-19 mortality and information freedom. If the people have no trust in the government, then the efforts it undertakes to adapt to an emergency situation may prove ineffective, and social activity can become destructive. In the future, it would be useful to compare the adaptive capacity of countries in terms of the rate of recovery of their economies after the pandemic.