The Legacy Effect: Decentralisation and Local Capacity in COVID-19 Crisis Management

Among crisis management literature, there is broad consensus that strong capacity, along with coordinated interaction between government agencies and actors, is essential to successful crisis response. However, there is comparatively limited discussion of the political institutions which underlie these factors. To address this gap, we focus on decentralisation and its role in the response to the COVID-19 pandemic. In current literature, the desirability of decentralisation is highly contested but there is general agreement on the existence of a trade-off between accountability and local capacity. Whilst decentralisation allows regional governments to tailor policy to local contexts and preferences by increasing local capacity, the devolution of autonomy creates complexity in the duties of governments and the distribution of funds. These complexities diminish accountability by interfering in the principal-agent model. Away from this dichotomous relationship, we test whether there exists a sweet spot in decentralisation, where local capacity is maximised whilst minimising loss of accountability. By increasing local capacity but also enshrining multilevel cooperation, countries can gain the benefits of decentralisation whilst ensuring accountability and oversight over regional governments is maintained; thus, achieving a decentralisation sweet spot. Utilising two different measures of decentralisation, the Regional Authority Index (RAI), and the Local Autonomy Index (LAI), we estimate the relationship between COVID-19 management and decentralisation. By taking advantage of the de-facto centralisation in accountability during the pandemic, we can isolate the effect of local capacity with the LAI. Our findings provide suggestive evidence that a Legacy Effect may exist where countries with normally high levels of local decentralisation have been able to better manage the COVID-19 pandemic. This implies there may be a decentralisation sweet spot, whereby centralising co-ordination and accountability whilst maintaining local government capacity can lead to the more effective crisis management. Future studies should look at the relationship between decentralisation and the procurement and rollout of vaccines, and the later waves of the pandemic.