Extreme events and the resilience of decentralised governance

Abstract

ABSTRACT Extreme events, such as economic crises, natural disasters or military conflicts, can affect the balance between centralisation and decentralisation forces across countries and transform, temporarily or more permanently, the design of multilevel governance. Using a panel of 91 developing and developed countries from 1960 to 2018, and another for Organisation for Economic Co-operation and Development (OECD) countries between 1995 and 2018, we examine the effects of extreme external shocks on the decentralisation level. We find that armed conflicts boost decentralisation, while natural disasters reduce it only in non-OECD countries, with long-lasting effects in both cases. Economic recessions do not have significant effects on the level of decentralisation, except for the lasting effects on expenditure recentralisation in OECD countries.