The Road to Economic Recovery: What Cities can Teach Us about Managing the COVID-19 Pandemic

By Nico Maffey • JUNE 2, 2021

It’s been almost seventeen months since the first case of COVID-19 was reported in Wuhan, China in December 2019. After spreading to almost every country in the world, the pandemic has not only taken millions of lives, but has also deeply disrupted national economies and individual businesses. Recent progress in mass vaccination campaigns has injected optimism into global economic forecasts, with a report by the World Bank predicting a 4 percent expansion in the global economy in 2021. Recovery trends are expected to diverge among countries and regions, however, as there are presently significant variations in vaccination rates, stimulus programs, and levels of economic integration. Cities have been hit hardest by COVID-19, as their large populations and high concentrations of economic activity have resulted in substantial restrictions and containment measures. Understanding how such cities have tackled the difficult task of preserving their citizens’ health while mitigating economic costs can serve to guide those government officials who are continuing to confront the pandemic’s devasting effects. This article examines how three of the most economically important cities in the Americas – Miami, Mexico City, and Buenos Aires ­– have used data to guide their respective roads to recovery.

Miami: Turning A Crisis Into An Opportunity

With shots offered along beaches and a steadily decreasing number of COVID-19 cases, Miami met the pandemic’s myriad challenges by catalyzing new partnerships and ensuring that data remained at the core of decision-making. Miami’s recovery – currently over 50 percent of adult county residents are fully vaccinated – is also a product of Florida’s state-level approach to COVID-19.  In September, Governor Ron DeSantis lifted most state-level restrictions, and on May 3rd, he suspended all remaining county and local municipality restrictions by executive order. While a controversial public health decision, Florida has since become one of the first states to return to economic activity levels comparable to March 2019, before the introduction of pandemic-related restrictions. In fact, an index created by Moody’s Analytics and CNN Business shows Florida as one of only five states which have achieved a 100 percent “back-to-normal” rating.

The Back-to-Normal Index- Moody’s Analytics and CNN Business partnered to create a proprietary Back-to-Normal Index, comprised of 37 national and seven state-level indicators, ranking every US State according to their economic activity relative to pre-pandemic levels.

Map of the U.S. with states color-coded for percentages open/back-to-normal, with most in the 80-90% range

Yet, far from attempting to simply return to how things were before the pandemic, Miami officials saw opportunity in the crisis. Jennifer Hernandez, a senior data scientist at the city’s Department of Innovation and Technology (DoIT) explained, “When COVID hit, we had to make sure that the Miami community could still access services, and still open businesses.  And to keep the economy going, we focused on making sure City services were available digitally – many of which were previously only available in-person.” Here, Miami joins a growing list of national and subnational governments that have rolled out large-scale innovations at an unprecedented pace. Digitizing public services has tremendous potential to impact economic recovery, not only through convenient 24/7 accessibility, but also through personnel cost savings as a result of automated processing.

The pandemic also spurred Miami to establish and grow existing partnerships. According to Jennifer Hernandez, “Through a partnership with Mastercard, we saw that online spending skyrocketed while in-person spending fell quickly, so we knew that mom-and-pop shops were going to be in trouble. And that helped us improve the services [Miami] provided.” But such innovations didn’t end with the private sector. Hernandez described the importance of collaborating with the federal government, whereby the city was “able to augment its business licensing data with federal data sets in order to understand which businesses were applying for help, and how help was being allocated and used.”  She went on to explain that through centralization of data, “Miami is combining siloed databases into a data warehouse to make better informed decisions.” As cities and states remain on the front lines on the economic battle against COVID-19, working together with federal policymakers will be crucial in getting the right help to Americans most in need.  

Miami’s ability to weather the pandemic is the result of years of effort to more widely embrace data in city government: “DoIT has been working for many years on building a data-driven culture in the government so that decision-makers feel comfortable understanding the power and limitations of data and we build a more resilient city,” explained Hernandez. Shifting data practices inside the government has been described as one of the most critical barriers to understanding the power of data in helping solve public problems. Thus, it’s no surprise that Miami’s success in making decisions in response to the pandemic is the result of longstanding efforts to promote a cultural shift in the way data is utilized.

Mexico City: Stepping Up To The Challenge Of Designing Smarter Lockdowns

Mexico City has recently entered its so-called “yellow” phase, meaning that economic activities will progressively reopen and return to normal. As vaccination rates increase and COVID-19 cases and hospitalizations continue to decrease, Mexico City will be able to join fourteen other Mexican states which have already entered the “green” phase, corresponding to few to no pandemic-related restrictions. Mexico City has been particularly affected by the pandemic because of its significant informal economy. In Mexico, over 22.6 million people work in informal jobs, of which 1.2 million live in Mexico City. Urban informality thrives on large and constant flows of people, as workers are usually found in street markets selling anything from food to electronics to furniture. As a result, prolonged lockdown restrictions since March 2020 have significantly impacted how informal vendors conduct their business, ultimately pushing many to rely almost exclusively on government support.  

Assistance to households and businesses at the federal level has, however, been deemed insufficient, as Mexico’s President, López Obrador, chose to prioritize fiscal stability, and avoid large-scale spending. In fact, Mexico’s stimulus during the pandemic, either through credits or tax breaks, ranks at the bottom of G-20 nations at just 0.6 percent of GDP, which pales in comparison to that of other developing economies, such as Brazil’s stimulus amounting to 8.3 percent, followed by South Africa and China, at 5.3 percent and 4.6 percent, respectively. This lack of federal government assistance was partially offset by Mexico City’s battery of social protection policies, including recent unemployment insurance benefits for almost 15,000 people who lost their jobsan increase in scholarships for low-income students enrolled in public schools, and microcredits for 50,000 SMEs

Mexico City previously in red (High Risk) was classified as Yellow (Medium Risk) as of May 10th for the first time since the COVID-19 pandemic began.

Green-Orange color coded map of Mexico marking low-high risk levels
Source: National Law Review.

The fact that Mexico’s most densely-populated city is nearing this low-risk milestone can be attributed, in part, to the work of its Digital Agency for Public Innovation (DAPI). This relatively small government office has played a critical role in centralizing and integrating epidemiological and economic indicators to inform lockdown policies and design smart regulations. As Mariano Muñoz, a General Director at DAPI in charge of institutional operations explained, “We worked on an economic recovery plan where we crossed real-time epidemiological data, which contained information such as number of cases and where and how people were getting infected, with sector-specific economic data to think about how and when to open things up. For example, we considered what it would mean to open up restaurants at 40 percent capacity, 60 percent capacity, etc. Those models were used to guide the restrictions that we implemented in the city.”

This examination of disaggregated data was similarly used to inform the measures adopted around public transport, which pose a high risk of contagiousness if appropriate distance, ventilation, and hygiene measures are not enforced: “We made sure that when we reopened certain sectors we understood what the transport demand would be to avoid high levels of congestion and concentrations of passengers.” There is evidence that these targeted, smarter lockdowns (as opposed to uniform restrictions across sectors and locations) can substantially reduce economic losses. Like Mexico City, such tailored responses to local conditions rely heavily on data, and are vital to managing infection rates and minimizing economic impact.

Similar to Miami’s DoIT, Mexico City’s DAPI has also helped digitize several public services to assist with economic recovery, such as a virtual unemployment insurance application for those who lost their jobs due to the COVID-19.  Additionally, Muñoz highlighted DAPI’s work in streamlining “microcredits targeted to small businesses, which allowed us to shorten processing times and to make sure we got the help quickly to those who were struggling economically.”

In contrast to the broad and blunt restrictions that other cities in Latin America have adopted, Mexico City’s use of data amid the pandemic illustrates the power of organizing and directing a targeted and sector-specific process of economic recovery by incorporating multiple layers of information to make comprehensive decisions in a context of uncertainty.

Buenos Aires- Rethinking The Economic Structure Of The City

Of the three cities examined, Buenos Aires is furthest from recovery. Whereas Miami and Mexico City are well on their way to normalcy, Buenos Aires recently announced a period of strict confinement expected to last at least until June 1st.  This restriction comes on the heels of one of the longest quarantines in the worldwhich was ultimately ineffective, as Argentina continues to have one of the highest COVID-19 mortality rates in the world. Not surprisingly, the protracted lockdowns have had a devastating effect on the economy. A recent study by Bloomberg which ranked 53 countries according to how effectively they handled the pandemic ranked Argentina 51st, with only Poland (52nd) and Brazil (53rd) performing worse. That there is still a strict lockdown in place means that an economic recovery is far from imminent. The pandemic has nonetheless served as an opportunity to rethink the economic structure of the city.

Juan Seco, General Director of Productive Development for the City of Buenos Aires, explained that “The pandemic pushed us to think of new ways in which we could propel economic recovery, and we realized that Buenos Aires still has unmet potential in the food service industry, which is also one of the sectors that the pandemic hit hardest. So aside from tax and fiscal benefits for restaurants and bars, we recently decided to create a wine district which will include a museum, wineries, and wine bars. This will help consolidate Buenos Aires as an international culinary destination, and bring with it many associated economic benefits.” With over 80 percent of its GDP represented by services such as restaurants, tourism, and cultural activities, Buenos Aires has been the most impacted jurisdiction in the country due to severe lockdown measureswhich for the most part have been unspecific and inconsistent. Redesigning its economic structure to get on the path to recovery will be a vital step for a city that needs all the help it can get to return to pre-pandemic levels of economic activity.

But the food and beverage industry isn’t the only one to have benefitted from this push to new urban economic activities. Seco added, “Buenos Aires has an incredible amount of talent in the ICT industry, and we are working hard to retain it, especially given what we are seeing as a result of the pandemic in the digital world. We recently passed a bill to support new scientific and technological ventures, which will help encourage investments and consolidate the city as an innovation and technology hub in the region.” As firms in the ICT sector have significantly profited from the pandemic-induced digitization that many companies and services have experienced, Buenos Aires’ focus on its competitive advantage might be the first hand it can play to bet on economic recovery.

The COVID-19 pandemic is an unprecedented challenge for cities on the front line, no matter their economic status. As a health, social, and economic crisis combined, it is laying bare how well city leaders are planning for recoveries and managing to contain the spread of the virus. This pandemic will continue forcing them to rethink the nature of their economies and realize the power and data they have to build safer, more resilient, and smarter cities.

About the Author

Nico Maffey

Nico Maffey is a writer for Data-Smart City Solutions at the Ash Center for Democratic Governance and Innovation. Originally from Argentina, Nico has worked across the public, nonprofit, and private sectors, where he focused on economic and social development, innovation, and digital transformation. He is currently a student in the MPA-ID program at the Harvard Kennedy School, and holds an A.B. from Harvard College and an M.S. in Applied Economics from Di Tella University in Buenos Aires.