  Countries with more democratic political regimes experienced greater GDP loss
and more deaths from Covid-19 in 2020. Using five different instrumental
variable strategies, we find that democracy is a major cause of the wealth and
health losses. This impact is global and is not driven by China and the US
alone. A key channel for democracy's negative impact is weaker and narrower
containment policies at the beginning of the outbreak, \textit{not} the speed
of introducing policies.
