How Crises Drive the Fragmentation of Global Governance: COVID-19 and Decentralization in the Financial Assistance Regime Complex

How do crises affect the (de-)centralization of global governance? The international order is characterized by regime complexes consisting of overlapping institutions, competing for authority. We expect crises to exert centrifugal forces on such complexes. During crises, states face incentives to shift resources away from liberal and inclusive institutions at the center while expanding the mandates of more flexible institutions on the periphery. We test this claim by exploiting a truly natural experiment studying the effects of the Covid-19 crisis on the regime complex of financial assistance (FA). The results of a qualitative process analysis of institutional crisis responses combined with a comparative network analysis of the FA complex support our argument. The Covid-19 pandemic led to further de-centralization of the complex. Institutions on the periphery, such as the Asian Infrastructure Investment Bank, offered a better functional fit with crisis requirements to states than legacy institutions such as the World Bank.