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

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  • Rodríguez-Pose, Andrés
  • Vidal-Bover, Miquel
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.

Suggested Citation

  • Rodríguez-Pose, Andrés & Vidal-Bover, Miquel, 2023. "Decentralisation, unfunded mandates, and the regional response to the COVID-19 pandemic," LSE Research Online Documents on Economics 120647, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:120647
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    References listed on IDEAS

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    1. Andrés Rodríguez-Pose & Roberto Ezcurra, 2011. "Is fiscal decentralization harmful for economic growth? Evidence from the OECD countries," Journal of Economic Geography, Oxford University Press, vol. 11(4), pages 619-643, July.
    2. Marcos Díaz Ramírez & Paolo Veneri & Alexander C. Lembcke, 2022. "Where did it hit harder? Understanding the geography of excess mortality during the COVID‐19 pandemic," Journal of Regional Science, Wiley Blackwell, vol. 62(3), pages 889-908, June.
    3. Simona Iammarino & Andrés Rodriguez-Pose & Michael Storper, 2019. "Regional inequality in Europe: evidence, theory and policy implications," Journal of Economic Geography, Oxford University Press, vol. 19(2), pages 273-298.
    4. Bardey, David & Fernandez Sierra, Manuel & Gravel, Alexis, 2021. "Coronavirus and Social Distancing: Do Non-Pharmaceutical-Interventions Work (at Least) in the Short Run?," IZA Discussion Papers 14095, Institute of Labor Economics (IZA).
    5. Sean Dougherty & Luca Lorenzoni & Alberto Marino & Fabrice Murtin, 2022. "The impact of decentralisation on the performance of health care systems: a non-linear relationship," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(4), pages 705-715, June.
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    Cited by:

    1. Marc Aliana & Diego Prior & Emili Tortosa-Ausina, 2024. "Assessing the impact of environmental factors on emergency healthcare quality: Implications for budget allocation," Working Papers 2024/04, Economics Department, Universitat Jaume I, Castellón (Spain).

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    More about this item

    Keywords

    decentralisation; unfunded mandates; Covid-19; regions; Europe; coronavirus;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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