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Battling COVID‐19 with dysfunctional federalism: Lessons from India

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  • Abishek Choutagunta
  • G. P. Manish
  • Shruti Rajagopalan

Abstract

The Indian federation is highly centripetal, and historically, this has left states without the requisite legislative and fiscal authority to take independent action and initiate policies of significance. Consequently, India's response to the global COVID‐19 pandemic was to impose a very severe countrywide lockdown using the mandate of the Union (federal) government. This centralized one‐size‐fits‐all diktat was imposed despite high variations across states in resources, healthcare capacity, and incidence of COVID‐19 cases. We argue that India's dysfunctional federalism is the reason for the centralized lockdown, preventing state and local governments from tailoring a policy response to suit local needs. Using mobility data, we demonstrate the high variation in curtailing mobility in different states through the centralized lockdown. We find that India's centralized lockdown was at best a partial success in a handful of states, while imposing enormous economic costs even in areas where few were affected by the pandemic.

Suggested Citation

  • Abishek Choutagunta & G. P. Manish & Shruti Rajagopalan, 2021. "Battling COVID‐19 with dysfunctional federalism: Lessons from India," Southern Economic Journal, John Wiley & Sons, vol. 87(4), pages 1267-1299, April.
    • Handle: RePEc:wly:soecon:v:87:y:2021:i:4:p:1267-1299
    DOI: 10.1002/soej.12501
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    References listed on IDEAS

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    1. Alena F. Kireyeva & Kiryl V. Rudy, 2024. "Paradoxes of the Anti-crisis Role of Fiscal Federalism: Analytical Review of Studies," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 3, pages 86-97, June.
    2. Breide, Lukas & Budzinski, Oliver & Grebel, Thomas & Mendelsohn, Juliane, 2023. "Forerunners vs. latecomers: Institutional competition in the German federalism during the COVID crisis," Ilmenau Economics Discussion Papers 182, Ilmenau University of Technology, Institute of Economics.
    3. Nicolás Cachanosky & Bryan P. Cutsinger & Thomas L. Hogan & William J. Luther & Alexander W. Salter, 2021. "The Federal Reserve's response to the COVID‐19 contraction: An initial appraisal," Southern Economic Journal, John Wiley & Sons, vol. 87(4), pages 1152-1174, April.
    4. Afridi, Farzana & Basistha, Ahana & Dhillon, Amrita & Serra, Danila, 2023. "Can Crises Affect Citizen Activism? Evidence from a Pandemic," CAGE Online Working Paper Series 693, Competitive Advantage in the Global Economy (CAGE).

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