Decentralisation, unfunded mandates and the regional response to the COVID-19 pandemic

Abstract

ABSTRACT The COVID-19 pandemic sparked a surge in the number and scope of governmental interventions in both centralised and decentralised states. While decentralisation theories and recent empirical studies suggest that highly decentralised systems are more resilient to shocks and cope better with adversity, other research presents inconclusive or even contradictory findings. Yet, little is still known about how decentralised governments coped with the COVID-19 health emergency. Using an original dataset of 445 regions across 26 Organisation for Economic Co-operation and Development (OECD) countries for 2020 and 2021, this article finds that excess mortality rates during the COVID-19 pandemic are not connected to the degree of fiscal and political decentralisation, but rather tied to the mismatch between the two dimensions, also known as unfunded mandates. Large unfunded mandates are positively associated with higher excess mortality rates during COVID-19. Fiscal and political decentralisation, by contrast, become statistically insignificant when unfunded mandates are considered. Hence, better – not more – decentralisation is needed as unfunded mandates represented a threat to the capacity of subnational authorities to address the COVID-19 emergency. In emergency situations, the dysfunctionality caused by unfunded mandates undermines the effectiveness of the response of the relevant public authorities to pressing challenges.