Do previous crises impact current policy?

Crises generate a pressure for political actions – to what extent are such actions affected by previous events? States and sub-national governments tend to develop programs to ease the consequences that stems from crises. For instance, financial crises tend to be followed by programs to stabilize the economy as well as reducing the increase in employment rates. Similarly, the Covid-19 pandemic has spurred an interest to develop health services. Some types of crises are reoccurring, financial crises being the most obvious one. This paper asks to what extent political units learn from prior crises. It is well-known that crises, such as sudden economic downturns affect geographic areas differently – both on national and sub-national levels. But do political units who have experienced greater downturns also develop more extensive services? This paper studies sub-national efforts to reduce unemployment and to what extent they are correlated with previous impact of crises by looking at the 290 municipalities of Sweden. In the midst of financial crises in the 1990s, Swedish municipalities increased their use of labour market policies to complement the national unemployment services. Today most municipalities have programs to reduce unemployment rates. However, there are great differences between municipalities in terms of reach and content – differences whose causes have do not been fully disentangled. The paper adds to the literature by introducing a historical perspective. The impact of three previous crises, (i) the financial crises in the 1990s, (ii) the financial crises in the 2010s and (iii) the migration crises in 2015, on current reach of labour market policies are analyzed. The analysis is quantitative and utilizes public data.