Decentralisation, Unfunded Mandates, and the Regional Response to the COVID-19 Pandemic

The COVID-19 pandemic has sparked a surge in the number and scope of governmental interventions, both in centralised and decentralised states. Decentralisation theories and recent empirical studies suggest that highly decentralised systems are more resilient to shocks and cope better with adversity. Yet, little is still known about how decentralised governments have coped with the COVID-19 health emergency. Using an original dataset of 445 regions across 26 OECD countries, this article finds that COVID-19-related mortality rates are not connected to the degree of fiscal and political decentralisation, but rather are tied to the mismatch between the two dimensions, also known as unfunded mandates. Large unfunded mandates are positively associated with higher COVID-19 mortality rates. Fiscal and political decentralisation, by contrast, become statistically insignificant, when unfunded mandates are considered. Hence, better Ñnot moreÑdecentralisation is needed, as unfunded mandates are 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.