Response of the Economic System to COVID-19: A Review of Evaluation Methods Applied in Assessing Economic Policies' Effects in Serbia

Introduction

The COVID-19 pandemic posed new challenges ahead of policymakers regarding developing adequate policy responses aimed at reducing its socioeconomic, political, health, and other adverse effects. Limited financial resources and a highly complex and rapidly changing environment, including the necessity to react promptly, represent critical issues for the successful implementation of anti-COVID-19 measures. The economic effects of the measures undertaken have been extensively analyzed in scientific papers. Although the number of studies related to the impacts of health measures is far more represented in the applied scientific literature, there is no shortage of analyses dealing with the evaluation of non-health measures. What is a characteristic of these studies and what gives them additional value is that the effects are rarely observed at the level of only one country, which is also understandable since the pandemic has been a global phenomenon. Some of the papers dealing with the policy response to the pandemic considering experiences from many countries/areas include Deb et al. (2021), Podolsky et al. (2022), Rezapour et al. (2021), etc.

The Serbian government reacted very quickly and prepared a series of measures to protect the population from the risk of contagion, allow the economy to function, and protect vital sectors, including certain categories of particularly affected citizens (Fiscal Council of the Republic of Serbia, 2020). Economic demand was also boosted by the payment of a one-time financial assistance to citizens and by measures to grant minimum wages to private sector employees (Marjanović & Đukić, 2020). The Serbian economy faced a major challenge. Even before the pandemic, the risk of poverty rate indicated that more than a quarter of the population was vulnerable (Ognjenović & Pavlović, 2021), and apart from high income inequality, which exceeded 37 Gini points, the Serbian labor market was characterized by the persistent practice of gender wage inequality (Ognjenović, 2021a). Although many businesses, especially micro, small and medium enterprises (MSME) and entrepreneurs, faced great uncertainty, most maintained pre-pandemic employment levels, helped by government measures (Adžić & Al-Mansour, 2021; Beraha & Đuričin, 2020; Vladisavljević et al., 2021). At the end of 2020, the decline in real gross domestic product (GDP) was only 1% (Fiscal Council of the Republic of Serbia, 2022a), and the labor market was characterized by an increase in inactivity (Ognjenović, 2022).

Economic impact assessments based on a counterfactual approach were rare in the pre-pandemic period. Some of them include an assessment of the impact of active labor market measures (Ognjenović, 2007). There are almost no studies dealing with the cost-effectiveness of economic and social policies in Serbia; at least they were not identified in the period when the impact of the COVID-19 pandemic was concerned. The purpose of this chapter is to analyze the methodological approaches that were used to evaluate the effectiveness of the policy measures applied in Serbia to minimize the negative socioeconomic impact of the pandemic. Thus, the main research questions include the evaluation approaches used to address specific evaluation issues, attempting to provide answers to whether the evaluation methods used were successful in answering the evaluation questions raised, where the financial support came from, who the evaluators were, and what the limitations of the evaluations conducted were.