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WHAT IS CONSIDERED FAIR WHEN ALLOCATING TRAGICALLY SCARCE RESOURCES DURING

PANDEMICS?

Steven Van de Walle, 13 April 2020

ABSTRACT

This viewpoint paper applies the literature on the allocation of scarce resources to current efforts to

cope with a massive demand for critical resources such as beds in intensive care units and mouth

masks. The public will consider some of the allocation choices administrators and health professionals

make as unfair based on their own conceptions of what is just. This has implications for the legitimacy

and thus support for COVID-19 responses. The article also outlines key points of attention for scholars

wanting to study the choices administrators make during a pandemic, and the way in which the public

responds to these choices.

INTRODUCTION

Public health responses to the COVID-19 pandemic may involve making tragic choices about

the allocation of what Calabresi and Bobbit (1978) have labelled “tragically scarce resources”: intensive

care unit beds, respirators, mouth masks, testing kids. Not being allocated these resources may result

in death. This allocation needs to be both effective and efficient (i.e. aimed at saving lives, and

preferably as many as possible), but it also needs to conform to principles that are generally regarded

in a society as fair. A classic example of scarce resource allocation is that of slots on rescue boats when

an overcrowded ship is sinking. Many would be hesitant to describe ‘first-come, first-served’ as an

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acceptable mechanism to fill these. ‘Women and children first’ would be seen as much more

appropriate and fair, but from an utilitarian perspective not necessarily as very cost-effective (Messick

1995). The public response to the announcement of how scarce resources will be allocated to the

public is essential for the legitimacy of governments´ response to the COVID-19 crisis.

We can learn from older work by philosophers, economists, sociologists, and public

administration scholars about allocation mechanisms. Demand for many specific public services is

higher than the supply. As a result, some citizens have to make do without this service or with a service

that does not entirely correspond to their preferences. In practice, this means they have to travel

further to enjoy the service, wait longer, use the service during less convenient hours or pay more.

Parents want to send their child to a good school in the vicinity; businesses want to profit from a

government subsidy to support innovation and research; patients want to be admitted to an excellent

hospital; elderly citizens want to get an affordable room in the care home where several of their friends

reside as well.

Issues of just distribution have received considerable attention (Rawls 1971; Elster 1992; Fisher

1998). ‘Who gets what, when, and how’ is a, if not thé classic question in political science (Lasswell

1936). In times of crisis, the mechanisms of allocation are more scrutinized than ever. To regulate

demand and supply, organisations need mechanisms. Not only to determine who gets access to the

service and who doesn’t, but also to regulate which specific user can use which specific service. Such

mechanisms determine not only whether a patient is eligible to receive a certain treatment at public

expense, but also at which hospital the patient will receive this treatment. Such mechanisms

determine whether a child will be admitted to a certain type of school, but also to which specific school

the child can go.

Scarce goods and services are allocated using quite different principles (Elster 1992: 11). While

we all ‘agree that the cake should be divided equally’ (Stone 2002: 39), there are many different ways

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to divide it equally. In a pure market environment, price is the principal allocation mechanism. In the

public sector, we see a wide range of mechanisms and criteria: place of residence (e.g. in school

catchment areas); need (e.g. social services); capacity-to-pay; first-come first-serve (e.g. receiving a

subsidy); merit (e.g. quality of a research proposal); random allocation (e.g. certain immigrant visa);

auctions; previous use criteria (where previous use excludes from new use, or where previous use

makes one eligible, e.g. in the case of preferential treatment of siblings in school admissions).

Some of these mechanisms are seen as more fair and just than others. Using an auctioning

mechanism for determining the order of being admitted to an ICU bed would probably generate quite

some discomfort, and first-come first-served would probably only in the beginning of the pandemic be

supported widely. Dutch researchers were dismayed to find that their National Science Foundation

allocated funds for COVID-19 related research on a first-come first-serve principle by closing the call

after just 3 days. Scholars would find a selection based on a list of selection criteria such as quality of

the proposal or of the proposer much fairer. We know relatively little about what determines these

fairness evaluations.

Hospital ethical committees are suggested to use a veil of ignorance approach when designing

or altering treatment and admission guidelines during the current pandemic to avoid unfair treatment.

However, this is not enough. Health administrators and public leaders also need to think about how

they will communicate about their allocation mechanisms, because not every mechanism that results

in a high number of survivors is necessarily regarded as fair. The ethics of rationing is a topic that has

received considerable attention in the sector of health, pandemics and vaccines or in other situations

where drug and equipment demand outstrips supply (Rosoff, 2012). In such situations, the use of

simple mechanisms such as first-come, first-served or lotteries may be perceived as fair procedures,

but they may also result in unacceptable or sometimes even seemingly strange outcomes, because

these mechanisms do not take individual situations, need or deservingness into account (Rosoff, 2012).

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DEALING WITH EXCESS DEMAND FOR PUBLIC SERVICES

For many public services, there is a quantitative shortage: Demand is high and supply is simply

insufficient. This is especially the case in areas where demand has been growing strongly in a short

time (as is the case during a pandemic), where demand is almost unlimited (e.g. health care), where

supply is limited (e.g. donor organs), or where the supply has been limited on purpose (e.g. subsidies).

In other situations, there is a qualitative shortage: The good or service is not scarce in a quantitative

way, but demand for high quality services is very high. Here, users want to use the best available public

service, and not just any public service. In other cases, qualitative differences in service provision (real

or imagined) create demand inequalities across these services and result in heavy pressure on some

providers, but not on others. This may for instance be the case for parents who want to send their

children to the best available local school, and where the school cannot cater for this demand, or at

least not in the short term. Likewise, many patients will want to see a specific GP with an excellent

reputation while another still has many vacancies. The system as a whole can in this case still cater for

all users, but mechanisms have to be developed for distributing the demand. This may mean that some

users will have to travel further to use the public service, or that some will have to use their second

choice service.

Price is generally absent as an allocation mechanism in the public sector. Other allocation

mechanisms are used (consciously or unconsciously) in a wide array of public services, and indeed

everywhere where there is qualitatively or quantitatively limited supply: art subsidies, school

admissions, parking spots for residents in inner cities, flats in council housing, places at child day care

facilities, immigration visa, etc. The examples can be more extreme as well: uneducated parents

desperately trying to get a place for their brilliant daughter in the best available school; or patients on

a waiting list for donor organs or for a bed and respirator in an ICU. In such extreme cases, allocation

and selection mechanisms are procedures devised by societies to support making tragic choices

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(Calabresi and Bobbit 1978).

There is a wide variety of selection and allocation mechanisms in daily use. Even mechanisms

that receive less attention in the theoretical literature do occur quite frequently in public allocation

decisions. Random allocation through lotteries does for instance happen in some systems for jury

selections, or for the allocation of social housing, immigrant visa, or even fishing rights (Elster 1992;

Taylor, Tsui et al. 2003). Auctions, in many variations, are used in some tendering procedures, e.g. for

the granting of telecom licenses (Janssen 2004). First-come first-served mechanisms are very common

in many administrative offices, and the use of waiting lists is likewise a very popular procedure to cope

with excess demand.

FIRST AND SECOND ORDER DECISIONS: JUSTICE VS LOCAL JUSTICE

The literature on allocation distinguishes between first and second order mechanisms. First

order mechanisms outline the global setting, reflecting the relative priorities of a society, for instance

reflecting the total amount of goods to be distributed, and societies’ opinion that a particular good is

considered priceless. Second order mechanisms allocate resources, and are often used by relatively

autonomous institutions (Elster 1992). They operate at a more decentralised and technical level, where

discretionary interpretation is needed, and where specific operational rules are set (Conley 1996).

These operational rules, while generally based on the first order mechanisms, always in some way ‘mar

some distributional ideals of the society’ (Calabresi and Bobbit 1978: 20).

In this viewpoint article, we focus on these second-order mechanisms, and more specifically

the work pioneered by Calabresi & Bobbit, and Elster (Calabresi and Bobbit 1978; Elster 1992). Unlike

philosophers such as Rawls and Nozick (Rawls 1971; Nozick 1974), their work does not search for

universal principles of allocation and distribution, and thus justice. Instead, it heavily emphasises local

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context in the selection of such rules (Sabbagh, Resh et al. 2006). Much path-breaking research into

the decentralized allocation of scarce goods has been done by Jon Elster, who looked at lay-offs, the

granting of immigration visa, access to higher education institutions etc., and the use of criteria and

mechanisms in doing so (need, merit, seniority etc.). He was specifically interested in ‘local justice’, or

in how allocation is done in the real world. Such systems show great variation across services, and

across jurisdictions. He talks about local justice, because there is a degree of autonomy for institutions

to design their own rules (1991). There is an endless variety of mechanisms. Most systems blend

different mechanisms, and organisations often use different operating principles at the same time

(Conley 1996), formally, and informally.

The issue of efficient and fair allocation of public goods has long fascinated researchers. Yet,

much of their work has focused on general principles, or political philosophy. There is also a remarkable

absence of research looking across disciplinary borders. Economists have studied market-based

mechanisms, while political scientists have given a great deal of attention to representative allocation

mechanisms. In public administration research, there exists a considerable tradition of looking at how

street-level bureaucrats make allocation decisions, yet much of this research has looked at substantive

criteria rather than procedural ones.

FAIRNESS OF SELECTION AND ALLOCATION MECHANISMS

When a ship is sinking, many would be hesitant to describe ‘first-come, first-served’ as an

acceptable mechanism to fill slots on the rescue boats. ‘Women and children first’ would be seen as

much more appropriate and fair, while not necessarily as more cost-effective (Messick 1995). The

appropriate allocation mechanism in a particular situation is not always easy to determine, and we

often see that quite different mechanisms are used for the allocation or distribution of similar

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resources. While equality appears as a very fair and just mechanism for allocating public services, it is

not always easy to implement in concrete situations (Yaari and Bar-Hillel 1984; Van de Walle 2006). In

real-life allocation procedures, we often see a mix of motives, contingency, and arbitrariness (Fassin

2003).

Some allocation mechanisms encounter more resistance than others. In allocation

procedures, people often have to cope with competing fairness norms (Bolton, Brandts et al. 2005).

Ubel’s research on the distribution of livers for transplantation suggested that cost-effectiveness

considerations may conflict with the public’s moral values (Ubel and Loewenstein 1996).

Frey and Pommerehne (1993), partly replicating classic research by Kahneman et al. (1986)

found that almost four out of five respondents found a pricing mechanism unfair in excess demand

situations. They studied the sale of snow shovels before and after heavy snow, and the fairness of a

higher price in the second situation. They studied the same attitudes towards the use of pricing in the

sale of water bottles to hikers on hot and cold days. First-come first-served was seen as the fairest

mechanism, while a price mechanism and a random assignment were seen as unfair. Erez studied

prisoners’ attitudes towards four selection procedures for participation in a programme: random

assignment, need, merit, and first-come first-served. Random assignment was seen as the least fair of

these selection methods (Erez 1985). Attitudes towards different types of allocation mechanisms have

also been studied in medical research and especially medical ethics (Ubel and Loewenstein 1996;

Green, Fong et al. 2001). Berman et al. (1985) experimentally studied cross-cultural differences in

allocation principle preferences and social justice, through asking Americans and Indians to distribute

200$ according to need, equality, or equity (or merit). It emerged that Indians tended to prefer need-

based distribution, while Americans preferred merit-based distribution.

Through studying the mechanisms used for allocating services and the way how choices are

made, we can study the moral values of a society. Such choices reflect the conceptions people hold

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about equal opportunities, where some would see a market price-based system as more egalitarian

and others consider first-come first-serve as more egalitarian (Kirchgässner 2005). Preferred

mechanisms, or mechanisms seen as just, are often seen as such because they provide the proponent

of the mechanism with more of the resource (Messick 1995). In other cases, mechanisms are preferred

because the procedure appears as fair, even when the outcome distribution is perhaps not

substantially fair. People not only value outcomes but also the procedures that lead to outcomes (Lind

and Tyler 1988; Frey, Benz et al. 2002; Bolton, Brandts et al. 2005; Frey and Stutzer 2005). Yet, a fair

procedure, may lead to outcomes that are considered unfair (e.g. an especially needy person not being

allocated a flat).

Theoretically, random allocation is often seen as a desirable mechanism because of its

unbiased selection (Bolton, Brandts et al. 2005). Lotteries, or random allocation ‘embody the naïve or

simple conception of equality’ (Calabresi and Bobbit 1978: 145). In fact they may lead to suboptimal

allocations or absurd solutions, and a loss of belief in equal treatment. Yet, they are able to maintain

the fiction of an incorruptible decision process (1978: 41-4). Likewise, first-come, first-served

mechanisms confer an advantage to first movers, or may privilege people with abundant time or

superior information over those without these resources; previous use rules advantage established

interests; certain price and auction mechanisms privilege the wealthy, etc. The core of the issue is that

‘allocation is, by its very nature, an act signifying inequality’ (1978: 143). Surprisingly, relatively few

researchers have looked at individual determinants of fairness evaluations (Allison and Messick 1990;

Olaug 2001). Innate characteristics of the allocation mechanisms, as listed above, suggest that

individuals’ resources in terms of time, knowledge or money may determine fairness perceptions.

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IMPLICATIONS FOR ADMINISTRATORS AND SCHOLARS

Choosing a mechanism to allocate scarce resources does not happen in a vacuum. Societies

and professional group have their own conceptions of what is considered an effective or a fair

mechanism. In times of crisis, they fall back on a repertoire of mechanism based on specific motives,

historical contingencies, but also on arbitrary choices. The final choices also often consist of a mix of

mechanisms (multiprinciple allocation systems), which have as an advantage that they incorporate

multiple moral considerations (Persad et al. 2009)

We know very little about why a certain mechanism is chosen, and even less about why a

mechanism is regarded as fair. Different professional groups, such as medical doctors, public budget

specialists, law enforcement professionals, or politicians from various parties, may have very different

views. The public as well may consider allocation mechanisms as either fair or unfair depending on the

type of scarce good or service that is being allocated, on whether or not they themselves or their

relatives have access to the resource, and perhaps on higher order social justice beliefs. Simply stating

that every life is priceless, and that everyone is entitled too essential resources during a pandemic is

of course morally just, but on the field other decision are taken.

Public administrators needs to be aware about the implications of the mechanism choices

they make, both on the actual allocation and on how the mechanism will be perceived. They also need

to be reflective about the procedures and institutions they use to make decisions about the choice of

allocation mechanism (Landwehr 2009), and whether or not such decision-making procedures and

institutions need to be representative and transparent in order to have outcomes that are perceived

as just (see also de Fine Licht 2011).

Scholars need to study what determines allocation mechanism choices and the fairness

perceptions associated with these choices, both among administrators, and among ordinary citizens.

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They also should explore whether the type of scarce resource that is being allocated has an effect on

such choices and fairness perceptions, and whether tragic choices made during a pandemic follow their

own logic, or whether they follow predictable path dependencies.

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