In this course we will examine the way federations managed the Global Financial Crisis (2007/08) and the ongoing COVID-19 Pandemic. In federal states, powers and responsibilities are distributed to two levels of government (a federal government and several constituent units). Due to their institutional complexity, federal states are expected to be less effective in managing crises, be they economic, financial or public health crises. Coordination problems, some would argue, undermine an effective, nationwide crisis response. At the same time, federations allow for targeted responses that take local circumstances into account and offer opportunities for policy learning.
However, federations handle crises in quite different ways, depending on their institutional arrangements, the constitutional allocation of powers and responsibilities, the policymaking process, and their political and economic situation. In some federations, governments coordinated the crisis management smoothly and effectively. Others experienced coordination problems. Yet others opted for a blanket approach decided by the federal government that failed to consider local circumstances.

This seminar will examine the differences in the way federations handled the Global Financial Crisis (2007/08) and the current COVID-19 Pandemic, focusing on mainly but not only Western federations. Students will learn about the main challenges that federations face in managing economic, financial, and public health crises. It encourages students to think critically about the trade-offs of different crisis management strategies and of different federal structures. We will also discuss whether crises really lead to a centralization of powers in the hands of the federal government.

The aim of the course is to introduce students to policymaking in federal and multilevel systems. We will also briefly discuss the European Union as a system that has many federal features and faces similar challenges during crises.