key: cord-1020055-f8dwfhma authors: Ramírezde la Cruz, Edgar E.; Grin, Eduardo José; Sanabria‐Pulido, Pablo; Cravacuore, Daniel; Orellana, Arturo title: The Transaction Costs of the Governments’ Response to the COVID‐19 Emergency in Latin America date: 2020-06-02 journal: Public Adm Rev DOI: 10.1111/puar.13259 sha: 47542755c41396cb967a39bac78cca7ff4ba040b doc_id: 1020055 cord_uid: f8dwfhma The COVID‐19 pandemic has created a crisis that is challenging national and local governments to innovate in their response to novel problems. Despite similarities to the challenges confronted in developed countries, Latin American governments face these problems amplified by structural obstacles such as social inequalities. These countries need to respond with capacities and resources often limited by spoils systems, as well as social and political polarization. In this context, we provide an overview of some innovative practices happening in Argentina, Brazil, Chile, Colombia, and México. In particular, we concentrate on some salient collaborative efforts in the region. To draw some lessons from these practices, we focus on the formal and informal institutions that facilitate or obstruct collaborations across jurisdictions. Moreover, we discuss our findings in terms of transaction costs for collaboration identified in these experiences. Local innovation has been relevant to face challenges generated by the pandemic. This crisis has challenged municipalities to implement new solutions that respond to a novel problem. In this context, creativity understood as the implementation of modern manners to face specific issues (Kruyen and Genugten 2017) seems to be an essential administrative and institutional capacity that provides more effective actions from local governments. At the same time, the agile-adaptive government can be a useful concept (Moon 2020 ) since municipalities will confront enormous and wicked problems. Governments will need to be faster, more transparent, and cooperate with many social actors developing new technologies and tools that generate and increase collective benefits. Besides innovation, the response to the COVID-19 crisis requires interaction between local authorities with different levels of governments, which has been a concern of public administration scholars for a long time, for instance, by looking at intergovernmental relations (Wright 1974; Kincaid and Stenberg 2011) . The interaction between levels of governments or jurisdictions is a significant issue because it often produces inefficiency in complex urban problems such as economic development (Agranoff and McGuire 1998; . Integrated solutions to complex problems are difficult to adopt and implement because government's individual pursuit of their goals and interests frequently results in collectively inefficient outcomes for urban areas. Similar to many regions in the world, Latin American local governments face significant governance challenges due to excessive fragmentation (such as Mexico City, São Paulo, Buenos Aires, and Santiago). This region includes several monocentric metropolitan areas, with some Accepted Article exceptions resulting from either intentional design (Lima) or as a result of the historical dominance of the central city (Bogotá) (Nickson 2011; Frey 2014) . Although certain aspects of urban governance problems faced in Latin America are similar to those encountered in the US, Canada, and Europe, some are unique. For example, contextual factors such as limited professionalization particularly in less developed cities, spoils systems, corruption, limited financial resources, involvement of national governments, and political risk aversion from local officials, are more salient in urban regions of Latin America. The Institutional Collective Action (ICA) could help to identify mechanisms for mitigating these problems by identifying elements that could facilitate collaborative efforts (Feiock 2013; Woods and Bowman 2017) . Although the classic public administration literature emphasized centralized solutions to the problems of collective action in urban areas, several alternative governance mechanisms may also be available (Feiock and Scholz 2010) . ICA dilemmas are political, as well as administrative, since they result from the fragmentation of political and administrative authority, they are also more complicated when government action at one level overlaps the functions or territory of actions pursued by governmental bodies at a higher or lower level of government (Feiock 2013) . Therefore, the COVID-19 pandemic response can be framed as an ICA dilemma to provide insights on how to improve the response from subnational governments and interjurisdictional collaborations. Considering collaboration complications on over-expanded and more connected territories, we concentrate on "transaction costs" (Brown and Potoski 2003) . Transaction cost analysis assumes that opportunism is present in collaborative efforts and that it is related to the costs of creating, monitoring, enforcing, and governing agreements for delivering public goods and services. Extant literature suggests several variables that could reduce Accepted Article transaction costs and therefore increase collaboration in developed countries (Thurmaier and Wood 2002; Col 2007; Klok, Denters, Boogers, and Sanders 2018) . In countries like the U.S.A., transaction costs use to be linked to characteristics and heterogeneity of subnational governments (Feiock 2007; Hawkins 2009; Ostrom 2010) . In this vein, local population size and socioeconomic differences should also be considered as relevant issues (Tavares and Feiock 2018; Soukopová and Vaceková 2018) . Also, the absence of institutional capacities and fiscal resources could be associated with more considerable transaction costs for collaborative arrangements (Lubell, Scneider, Scholz, and Mete 2002) . Next, we present how local governments in five Latin American countries are dealing with their challenges in this crisis: Argentina, Brazil, Chile, Colombia, and Mexico. Each case includes three elements. First, the institutional and social context in which governments confront the epidemic with an emphasis on actions taken by subnational governments. Second, an overview of local governments' response to the crisis. Finally, we present for each country a brief example of inter-jurisdictional collaboration that could help to identify insights for reducing transaction costs and increasing economies of scale. When seeing as one significant experience, these examples provide valuable insight on how public officials could use formal and informal institutions and innovative tools to improve the COVID-19 crisis response, and in particular, to improve inter-jurisdictional collaboration. This article is protected by copyright. All rights reserved. Argentina faces the COVID-19 pandemic with two weaknesses: a national government which recently took possession in December 2019, and a precarious economic situation. The Argentinian peso has lost 68% of its value since April 2018, annual inflation exceeds 50%, and after a 2.5% drop in GDP in 2018, the economy contracted and additional 2,2% in 2019 (World Bank 2020). In addition to these difficulties, the federal government faces complications for paying the external debt, which could have an impact on sub-national governments. Moreover, during the past year, twenty-one provinces elected governors, and more than two thousand localities elected mayors, which took power under weak fiscal conditions. The Argentine municipal system has severe problems, despite having an institutional framework with high levels of institutional and political autonomy. Scarcely endowed with resources, it allocates a high proportion to paying wages and current expenses, leaving investment to be resolved by transfers originating discretionarily at other government levels (Cravacuore 2017) . Local governments concentrate on service provisions such as street cleaning, resource collection, street lighting, primary health, disadvantaged social groups, and additional services depending on resource availability (Cravacuore 2016) . A more complex local agenda characterizes municipalities in metropolitan areas, while, in rural areas exist significant infrastructure and service shortages. In the face of the pandemic, the most immediate challenge has been to support health care. Although municipalities are usually in charge of primary healthcare, leaving more complex care to provincial and private hospitals, healthcare is a concurrent function among the three government levels (Becerril-Montekio and Bello 2011). This coordination exists, despite the absence of formal mechanisms in the municipalities of the Buenos Aires metropolitan area. This Accepted Article area is likely to be the most severely affected by the COVID-19 pandemic, given a combination of population density, weakness of the complex health system, and poverty levels. In terms of competencies, the municipalities continue to support essential services: collection and final disposal of waste; urban cleaning and maintenance; food delivery to deprived parts of the population; and primary healthcare -particularly, the general influenza vaccination-. As a novel element, during the pandemic the national government expanded municipal capabilities, which allow price control on food and essential cleaning products (Decree PEN 351/20). Argentinian local governments have demonstrated, in times of severe crisis such as 2002, an essential resilience due to a robust territorial network (Clemente and Girolami 2006) . However, the recentralization process has complicated intergovernmental coordination in particular for social policies (Cravacuore 2017) . In this crisis, their first reaction was to limit access to localities in order to concentrate control, and to implement checkpoints to review documentation and assess the physical driver's condition. However, mayors were warned of these checkpoints' illegality if they were set on national or provincial jurisdiction routes, because local regulations are only legal if they do not contradict federal or provincial provisions. This situation even motivated judicial decisions to reverse policies adopted by mayors. In terms of preventive measures, free alcohol gel and sodium hypochlorite delivery for home use is standard. Many municipalities also produced educational material for homes and businesses, distributing them on social networks. Local governments also activated production ventures dedicated to making chinstraps and clothing for health personnel. More recently, some Accepted Article have begun installing tunnels for vehicle disinfection, and disinfecting public areas using chlorinated water. In larger municipalities, governments are preparing isolation beds for the mildly infected people in hotels, universities, schools, and sports clubs, along with the preparation of graves in cemeteries. In terms of healthcare, it is worth highlighting the coordination between the three levels of government to build, in 45 days, twelve modular hospitals in the most populous districts of the country. These hospitals add 350 new intensive care beds and 650 intermediate therapy beds to the system: municipalities have been responsible for soil movement and concreting. Several municipalities have advance social policies, for instance, by forming volunteer networks to assist older adults in purchasing food and medicine. They have also accelerated the delivery of supplementary food for poor households, in the format of weekly baskets or daily meals. Given the closure of school cafeterias, the municipality of Berazategui provides a checkbook to use in local businesses. These grants complement the Food Card, a recently implemented weekly food voucher for poor households. Regarding mental health care, some municipalities created telephone programs for psychological attention. In the same direction, many cities reinforced telephone attention systems for domestic violence reports, to prevent their increase. Among the tax relief actions, the collection postponement of municipal taxes and fees is widespread, both for households and affected businesses. Municipalities with higher economic capacity announced credits to help companies and jobs, mainly destined for micro, small and medium-sized companies, with subsidized interest rates. These measures supplement actions taken by the national government, which is providing part of the monthly salary for workers in companies whose sales income fell. Finally, Municipalities with more significant resources have developed mobile applications to geolocate open stores; others launched, even before federal government, applications for self-assessment and for detected COVID-19 follow-up cases. Finally, others use technology to implement random controls to verify the mandatory quarantine of people who returned from abroad. In summary, the municipal system responds to the COVID-19 coronavirus pandemic crisis with creativity, although generally encapsulated within local jurisdiction, vocation and commitment from public officials, and with few resources (Cravacuore 2017) . A remarkable case of collaboration for Argentina has been the various meetings between Mayors and the president, which are not frequent since the municipal regime is a provincial responsibility. In this exceptional period, the first meeting between Mayors of the Metropolitan Area of Buenos Aires where a third of Argentinian population lives -along with national ministers and governors of the Autonomous City and the Province of Buenos Aires was a remarkable event. A meeting on March 23 focused on sanitary conditions, evaluating the availability of hospital beds, mechanical respirators, and places for isolation of mild patients, as well as territorial control of preventive and compulsory social isolation. "The meeting was incredibly positive, everything is being organized very well and quickly with the municipalities," said an opposition Mayor, adding another of the same party: "There were no chicanes or political questions. Fear unites us" (1). A Mayor said after that meeting, "We are all working together, in permanent communication, so that the quarantine program works better every day." A week later, the president met again with these metropolitans Mayors: to the initial public Accepted Article health concern, they added the municipal fiscal situation, given the fiscal collapse the National government offered to support payment wages and essential services. After this videoconference, an opposition mayor declared: "The funds for municipalities are guaranteed"(2). This situation contrasts with the lack of coordination verified in the early days when many local governments advanced in regulations that were stricter than those established by the national government regarding the free transit of essential services. Two weeks later, the president held an extensive virtual meeting with the mayors of several urban municipalities. According to the press, president Fernández listened to the report of the municipal chiefs on the situation in each district, took notes and asked them for details on some specific matters (3). These mayors were from different parties and represented 25% of the national population. In the context of the quarantine, the federal government structured rules to coordinate other collaborative actions in addition to the Decree 260/20. An example was the presidential decree 351/20, which extended to municipalities the power to control the supply and maximum prices of food and essential products during the health emergency. The ending of preventive and compulsory social isolation presents a new intergovernmental coordination challenge. Given that the COVID-19 coronavirus pandemic has not impacted 10% of the country's local governments, in some territories existed conditions for a relatively accelerated opening of the economy. The mechanism defined in decree PEN 408/20 indicated that governors must present protocols to the Chief of the Cabinet of Ministers to reopen industrial, commercial, and leisure activities, which must be authorized according to certain epidemiological conditions. The same happens at the municipal level, where Mayors must Accepted Article present reopening operation plans to provincial governments. This new institutional arrangement forced new interactions and revitalized intergovernmental relations. Brazilian municipalities were the most favored federative entity with the return of democracy and the new constitutional pact signed in 1988 (Wilson et al. 2009 ). They expanded their political autonomy, increased their revenues and intergovernmental transfers, and became the main responsible level for welfare policy implementation, particularly in education, health, and social assistance (Arretche 2013) . However, historical weaknesses and other difficulties regarding their roles in the federation have brought four significant challenges to light: municipal financing, state capacities, provision of public services, and intermunicipal cooperation. The challenge of fiscal sustainability is a structural issue for local governments. Available evidence shows that financial weaknesses of the vast majority of municipalities were already growing and exposing their financing difficulties. In 2019, about 35% of local governments did not maintain their administrative structure, and almost half of all cities spent more than 54% of their revenues just on personnel (Firjan 2020) . According to the Observatory of Municipal Information (2019), in 2018, municipalities with less than 50 thousand inhabitants (89% of the total) collected only 8.4% of their own revenue. As for intergovernmental transfers, on average, 66% of local resources come from other spheres of government. This dependence on transfers is high for cities with less than 20 thousand inhabitants (87% of the whole). The scarcity of financial resources is likely to stress even more in pandemic times. State capacity regarding management and planning lacks in most localities, and many will likely be ill-prepared to deal with the multidimensional effects of the pandemic. For instance, the Millennium Development Goals and Agenda 21 (implemented in 22% municipalities in 2015) and the Master Plan (adopted in 30% in 2015) can be proxies for local planning capacity (Grin and Fernandes, 2019) . Moreover, it is still necessary to link the constitutional planning instruments, required by the Federal Constitution, to real government planning as is the case with the multi-annual budget and plan. According to Veloso et al. (2011) , the use of Strategic Planning is a privilege of the most organized and largest municipalities (63%), while existing in only 27% of the smaller ones. Regarding public services provision, there are two key issues. The Constitution mandates the decentralization of policies to municipalities in such areas as health, education, and social assistance and by the mechanisms of financing and federal induction (Arretche 1999; Franzese and Abrucio 2013) . A level below are policies delivered with more discretion by cities, such as human rights, environment, and urban development policies. Only affluent municipalities cover the second level of services and deal with problems of different social complexities. Thus, state capacities are insufficient to successfully achieve homogeneous results in their activity areas (Grin and Fernandes 2019) . Finally, intermunicipal collaboration is widespread in Brazil, especially in smaller cities (Grin and Abrucio 2017; Machado e Andrade 2014). However, the extension of the pandemic will require regional responses, so territorial associations should be intensified in quantity and quality. A territorial response by each policy sector will be insufficient to deal with the various connected dimensions that the pandemic will demand from local governments. Thus, responses Accepted Article will require creating new inter-municipal consortiums, deepening formulation and implementation of solutions, and moving towards multi-purpose consortia. Technology has been one of the primary weapons to fight COVID-19 in the most developed municipalities. As an example, the city of Campina Grande (state of Paraiban/northeast region) created a data management system to monitor, in real-time, compliance with home isolation. The software uses the GPS of users' cell phones, along with free tools from Google Maps and Google Transit, to monitor displacement of confirmed and suspected COVID-19 cases registered in the municipality. The system was created through a partnership between NGO Digital Citizenship Space, State Court, of Auditors, and the Public Ministry. Monitoring is done based on the users' email and cell phone data, which are provided during the contact of health teams with patients when collecting COVID-19 tests. When monitored people fail to comply with home isolation recommendations, technicians from the Municipal Health Secretariat will be notified of the patient's travel to other areas outside their residence. Upon receiving notifications, health surveillance agents make immediate phone or text message contact, alerting patients of the risks caused by noncompliance with medical guidelines. Besides monitoring patients outside the home area, the system also allows healthcare teams to identify whether a patient is going towards crowded areas or to neighborhoods with larger highrisk populations. Other big cities have implemented necessary measures for sustainable local development. The municipality of Santo André (state of São Paulo) implemented two emergency measures through Bureau Serviços Tecnológica, which is part of the City's Technological Park. The first Accepted Article aims to stimulate local development through a partnership between the City Hall and a startup that makes it available for all existing companies in the city, to use the Drive-thru system as a means to sell and deliver products and services. The aim is to ensure that the economy and local companies continue to sell, buy, and publicize their activities while social isolation measures are in place. The project exempts all establishments, stores, and service providers residing in the city from every fee. One of the incentives generated by the initiative is to expand the use of information technology as a resource to keep businesses operating. Among other facilities, a chat was installed so that interested entrepreneurs can have their questions quickly answered. The second project is "Digital Volunteer Network" and was also developed in partnership with a startup and a federal agency to support small businesses. People in need of support can download the Helpers application and request assistance to purchase different kinds of home services, online attendance, or aid in other sorts of demands, preventing people from leaving their houses. These two cases of local innovation make use of the possibilities opened up by the digital economy, to meet two essential objectives: ensure people's lives, and reduce adverse effects on employment and income, especially in the less favored social groups. Small or weak municipalities have relied on previous regional partnerships to pull resources and fight the pandemic. An example is Santa Catarina Interfederative Consortium (CINCATARINA), which is a public entity formally constituted for multiple purposes since 2010 in this southern state. Municipalities need to sign a contract which defines rules on duties, rights of membership, and modest financial contributions to participate. Based on collective Accepted Article efforts, it develops programs, government projects, integration initiatives, it strengthens shared operations, innovation, and public management modernization. CINCATARINA includes 109 associated municipalities (36% of the total in the state, mainly small towns with limited administrative capacities). 62% of its members are municipalities with less than 10,000 inhabitants, and another 17% have a population of fewer than 20,000 people. Since it is a public entity, cities just pay a fee and formalize its adhesion through the approval of the City Council to participate in CINCATARINA, regardless of their limited taxing, financial, or bureaucratic capacities. To support municipalities during the emergency generated by the COVID-19 pandemic, CINCATARINA created a platform called PANEL COVID-19 (https://www.cincatarina.sc.gov.br/covid19/) so that information about products, services, and supplies needed for the prevention and treatment of Covid-19 can be found quickly and easily. The Panel seeks to promote the administrative rationality of services to optimize the time of public and private agents involved in tackling this pandemic. Also, it facilitates communication between the Public Authorities, Philanthropic Entities, and Companies by making transparent the purchasing of all materials and goods to face the health crisis. The goal is not to generate a broker business, but to offer a participatory and collaborative database to help municipalities involved in Covid-19's treatment to find supplies to cover current needs. Of particular interest for small towns is the support of the platform providing guidelines and records regarding administrative procedures for acquisitions without the need for bidding. The most important result of the platform is to enable a collaborative system between companies and suppliers that can be quickly updated. The system already contains registered needs for 125 products, of which only about 14 products do not have a certified supplier. The Accepted Article platform already includes 252 registered suppliers, which can be the same for more than one product, but, on average, there are more than two for each registered need. Thus, the search for suppliers is faster and can be mediated by CINCATARINA, even if purchases are locally executed. Therefore, the expedited procurement processes have helped to ensure that lives can be saved based on transparency, integrity, and ethics in purchasing procedures for products and services, which is one of the most relevant results from institutionalized inter-municipal cooperation experience. Moreover, using the consortium's expertise in shared bids is an essential aspect at this point. Still, it only became possible in a short time due to the previous existence of this cooperative arrangement. The COVID-19 pandemic has exposed Chile's institutional capacity due to the problems of multilevel governance that affect the ability to articulate and coordinate actions between different government levels (OECD-SUBDERE, 2017). The origin of this problem is the managerialist approach utilized since the 1960s, which consistently promoted urban entrepreneurship focused on multiple projects and little urban and territorial planning (Harvey 1989) . This approach also supported governance mechanisms for public services in which public organizations take risks, and private enterprises capture the benefits of speculative market actions (Harvey 1989) . The structural problems resulted in social protests that began on October 18, 2019, triggered by popular discontent towards price increases of underground transportation and other essential services. The protests led to confidence crisis in the authorities and political class that had not been seen since the recovery of democracy. These protests forced authorities and Accepted Article legislators to elaborate on a social agenda and commit to having a referendum on potential changes or reforms of the Political Constitution. Because the Constitution dates back to the dictatorship (1973) (1974) (1975) (1976) (1977) (1978) (1979) (1980) (1981) (1982) (1983) (1984) (1985) (1986) (1987) (1988) (1989) , it is considered by some to have norms that concentrate power on the country elites, benefiting them by oppressing the rest of the population. only Uruguay presents a better result with 4.5%. The fundamental inequalities occur in the provision of public and private goods, and in services between communes, where diverse social, economic, and environmental realities are shown in broad gaps in socio-territorial inequality. In particular, in the Chilean case, its most significant expression is manifested in metropolitan areas (Orellana et al., 2013) . The inequality between communes has been documented in various studies of urban quality of life, especially in metropolitan areas (Vicuña et al. 2019; Orellana and Marshall 2019) . The metropolitan level is also characterized by the absence of leadership due to the lack of regional authority that could plan and manage the affairs of the city that involve two or more communes. In this context, conflicts between local jurisdictions and the ministries that depend on Accepted Article the central government are frequent. In particular, local disputes are accentuated by the presence of "Intendents," who are administrators of regional governments appointed by the president. For this reason, intendents often lack political legitimacy and were seen by protesters as repressors. For demonstrators in the streets, Mayors, who are democratically elected every four years, could play a role as mediators in the conflict. Urban issues are highly relevant since two out of three people live in the ten metropolitan areas legally defined. The metropolitan area of Santiago, Valparaíso, and along with Concepción are the most important because they represent 51.4% of the country's population. In addition to this condition of high sociodemographic concentration, inequality is added in terms of urban quality of life in a country that has 90% of urban population but where municipalities only have authority to decide on 8% of public investment (Horts 2018). Also, differences in terms of per capita budget by commune are substantial and fluctuate between 1,300 and 180 US Dollars (Orellana & Marshall 2017) . The Constitution. In this context, President Piñera, whose disapproval reached more than 80% recently, saw an opportunity to reposition his leadership in the country by managing the COVID-19 crisis using the current institutional arrangement. The Constitution grants the president the authority to establish a state of emergency, which empowered the central government to confront and coordinate under a single command actions to face the crisis. At that time, the central government had unsuccessfully attempted to exclude Mayors from participating in the command and coordination panel that confronts the COVID-19 crisis, relegating them to mere implementors of decisions taken at the central level. These exclusion efforts had been unsuccessful, given mayor's legitimacy and their direct contact with social groups and citizens. The so-called "mayors' rebellion" has highlighted in Chile, during the health crisis, the need to advance in administrative and fiscal decentralization towards the local level. This decentralization is requested by citizens and local authorities to resolve problems associated with the wide gaps in quality of urban life in terms of health benefits, job accessibility and protection against crime, aspects affected by the health crisis. Given the level of segregation that exists between communes (Vicuña et al. 2019) , it is challenging to apply measures such as quarantine. In many communes, households' heads need to work in the informal economy, otherwise home overcrowding increases domestic and gender violence, especially in the absence of programs to cover the households' requirements of temporary confinement. For this reason, Mayors' knowledge of local demands and activities is essential for ethical decision-making regarding local matters such as restricting commercial operations or the transit of people. Regardless of their capacity, many municipalities had taken measures even before the central government. Banning temporary operations of large shopping centers, limiting access to public parks, or requesting people to wear masks in public places have been some of the decisions taken by municipalities before the central government. However, only a small number of more affluent communes located in the metropolitan area of Santiago had implemented programs such as internet services to facilitate the access of children and adolescents to their online classes in public schools. Home services for influenza vaccination to the higher risk population, sanitation at the entrance of public offices, or even temporary accommodation for women victims of gender violence are examples of actions taken only by more affluent cities. This situation has exposed the inequality of public services managed at the local level in metropolitan areas. Finally, the coordination problems in multilevel governance already evident in Chile (OECD-SUBDERE 2017), added to the social crisis that preceded the situation caused by the COVID-19 pandemic. The role of local governments has been key to containing and directing citizens' demands to the central government, taking advantage above all of the greater legitimacy that mayors currently have concerning other political, legislative, judicial, religious, and uniformed authorities. Moreover, police and military officers have been rejected, and their actions often disapproved by citizens in part due to the social situation prevailing before the crisis. Therefore, one of the lessons that the COVID-19 pandemic is giving now to local authorities and society is that strengthening local capacities is urgent and necessary to deal with issues like those associated with the COVID-19 pandemic. For that reason, it seems imperative to introduce legal reforms to strengthen the country's decentralization and regionalization process. Also, it is needed to allow the existence of supra-municipal or inter-municipal Accepted Article institutions that give municipalities a more significant role to govern, plan and manage public policies that reduce the gap in urban quality of life between communes and cities, especially in metropolitan areas. Since the start of the COVID-19 pandemic, one of the central claims of municipalities has been a lack of powers to help confront the crisis. For example, Municipalities did not have the authority to prevent people from breaking a quarantine already decreed by the national health authorities. Accepted Article associations has allowed it to be influential on issues such as local finances, housing, health, education, environment, among others. The significant increase in leadership and legitimacy before the public opinion of Mayors has not been translated into associative practices to combat pandemic as in other countries. This lack of coordinated efforts is mainly due to the centralist character of the Chilean state. However, media siding with Mayors has questioned the Institutional framework. For this reason, the national government, in agreement with municipality associations, recently signed a law decree giving special funding and greater power for cities to police compliance with curfew and quarantine policies. Given that policing social distancing seems to be critical to prevent collapsing health systems, the new powers of the municipalities are a substantial accomplishment. The new regulations allow local governments to apply fines for the non-use of masks in public spaces, sanction those who do not respect the curfew and quarantines, issue permits to citizens to circulate for exceptional reasons, and prevent the formation of crowds or meetings including more than 50 people. Although these powers were exercise previously by some municipalities through special laws, standardizing these powers constitutes a significant advance by the central government towards recognizing the importance of municipalities for the implementation of national policies. Transferring public safety responsibilities to cities to confront the pandemic could be the first step towards greater decentralization and more responsive public policies. In summary, through associative platforms such as the Chilean Association of Municipalities that bring together almost all of the country's municipalities, Mayors from all parties have managed to reach agreements to support a common strategy vis-à-vis the central Accepted Article government. These platforms have also provided a forum for them to share experiences and work practices to confront COVID-19. Colombia is a unitary decentralized country. This definition implies a particular distribution of competencies and roles between the national and the subnational governments (Sanabria, 2015) . Whereas social policy is highly decentralized, and there is a high proportion of resources transferred from the central government to the subnational units, several aspects remain in charge of the national government. Notably, the executive branch concentrates a greater proportion of power vis a vis other branches and government levels. The COVID-19 has revealed an increasing level of tension in intergovernmental relations, in a country with a strong tradition of almost permanent central vs. local governments bargaining and with historical claims from the regions to increase their autonomy. The 1991 political constitution paid attention to those claims and adopted an extensive decentralization focus. In this context, through the new Constitution, municipalities acquired a broader set of functions and greater autonomy (Sanabria 2019) . They became the locus of social policy, and more specifically, municipalities assumed implementation of education, health, and public utilities policies and programs. Thus, although Colombia has three levels in its current multilevel governance structure: national, departmental (provincial/state level), and municipal. Since incorporating new functions, municipalities became much more powerful vis a vis the central government, particularly Accepted Article concerning the so called "departamentos". In Colombia, there are 32 "departamentos", one Capital District, Bogotá, and around 1,103 municipalities. Municipalities are classified in seven different levels according to their size and administrative capability. The Special category and Category One gather the larger cities, whereas categories 1 to 6 include smaller municipalities, being 5 and 6 the most frequent since those are subsequently the ones with a smaller size (and with lower institutional capacity). In this context, Colombia has historically had a dynamic (and tense) IGR scenario whereby stable regions have claimed high levels of centralism, particularly from the executive branch. In this context, the COVD-19 emergency response brought new tensions across l government levels and made highly evident the expectation from larger subnational governments (departmental and municipal) to adopt and implement local agendas that, in principle, did not necessarily conform to the goals and programs of the national government. Whereas the response from subnational governments appeared more rapidly and with some concrete measures (school closing, mobility bans, local curfews, among others), the national government seemingly took a bit longer to announce and execute actions. This gap response times, and the diversity of measures taken by municipal/provincial governments, created some misalignment perception in the coordination between the different government levels. The emergency response triggered palpable frictions between the national level, namely the president and his cabinet, and some of the mayors and governors of the subnational units, Several of those measures attempted to clarify and reaffirm the preeminence of nationallevel policies over subnational actions, since they initially started to appear rapidly and created confusion between government levels, particularly regarding restrictions to mobility law and order. Thus, the presidency deliberatively aimed to play a more central role over subnational authorities. Decree 418/2020 explicitly states that, during the emergency, all national government definitions regarding law and order are superior to those of local authorities, as well, departmental level definitions supersede municipal level regulations. Also, all actions were taken by governors and mayors regarding security, public order, etc. must be reported first to the Ministry of the Interior; otherwise, any violation would imply stringent sanctions upon subnational authorities attempting to violate such mandates. Nonetheless, multilevel governance works despite the tensions mentioned earlier, and the national government also enacted a series of measures that aimed to provide some leeway and autonomy on certain local government issues. Several of the response measures are both taken, regulated, or either implemented by national and subnational authorities alike. For instance, the national government rules (Decree 419/2020) allowed Governors (heads of departmental governments) and Mayors (heads of municipalities) to extend for an extra month the period in office for Hospital Managers who were about to finish their periods (March 2020). Also, amid the declaration of economic and social emergency (special powers to the president), by decree Accepted Article 512/2020, the national government allowed subnational governments to temporarily make budgetary changes according to the emergency needs. Furthermore, as part of the emergency response national government provided local authorities with special powers to temporarily enhance health services, allowing them to contract out human and equipment resources (Decree 538/2020), procurement of health devices and Personal Protective Equipment (PPE) (Decree 499/2020), as well as to streamline the process for regional investment projects funded with royalties from the extraction of oil and other natural resources (Decree 513/2020). Thus, not all the measures from the executive branch were intended to curtail local/subnational responses. Nonetheless, it has been evident that the competition to provide timely responses remains, even for worthy purposes. For instance, the Colombian model of cash transfers, which has been running for the last two decades at the national level (implemented by subnational governments), generated essential lessons that have been materialized during the emergency. Both national and subnational level agencies (particularly in the most significant cities) have designed and implemented relatively sophisticated schemes to provide money and in-kind aid to vulnerable households and individuals. The whole implementation process has been successful and has proved the capacity that the country has generated to identify potential beneficiaries effectively and to transfer aid to them. However, the context in which such programs have taken place as part of the emergency response revealed a sort of national and local governments' race about who arrives first. Until now, the decentralization model of Colombia has proven effective for the most developed regions, and particularly for the largest cities and their surrounding areas. Until now, the divergent results appear to be related to the strength of the national-subnational relationships and the ability of local leaders to collaborate with the presidency of the country and the central government. Two key examples epitomize the differences both in numbers in terms of the pandemic, and regarding the intergovernmental relations (IGR) strategies: the capital district of Bogotá and the city of Medellín. By the end of May 2020, Bogota is getting around 7,000 cases of COVID infection, whereas Medellín has barely exceeded 100 cases. Although both cities have evident differences in size (Bogotá has approximately 8 million inhabitants and Medellín nearly 4 million in the metropolitan area), they concentrate together most of the economic activity in the country and show very different approaches to public policy and management. For instance, while Bogota has been active in pursuing tertiarization and private provision of public services, Medellin keeps an almost exclusively public model of public service provision that is the foundation for a more professional local bureaucracy. The approach of the local governments' relationship with the national government has been entirely dissimilar. On the one hand, the Mayor of Bogota initially adopted measures that were implemented faster than the central government definitions, and it started rivaling some of the national measures in the media. On the other hand, both the Mayor of Medellín and the Governor of the Departamento of Antioquia, from which Medellín is the capital, adopted a more collaborative outlook with the central government and the presidency of the republic. The latter approach has been mentioned several times by both national and subnational actors as one of the key elements that explain the more successful results of the Medellín strategy towards COVID- Although there are other factors that, by all means, could help explain the success of the anti-COVID-19 strategy in Medellin (use of technology in virus tracing, strong local/regional Accepted Article culture of abidance to public measures, a long-lasting model of collaborative governance between the public and the private sectors, a robust metropolitan governance structure), the higher level of coordination with the national government has helped the implementation of crucial strategies according to the Mayor of Medellín himself. Medellin adopted the national guidelines immediately after they were issued and received some cooperation from the Ministry of Health and the National Institute of Health to activate most of the testing and tracing strategy. The city also followed (and even anticipated) key national measures regarding the lockdown and the subsequent gradual reactivation of vital economic sectors and has adopted a less confronting strategy towards the national government. The country begins to confront the emergency of COVID-19 in a situation that is already Inequalities between municipalities in Mexico is a highly recognized and studied topic. In the case of municipal governments, the picture is bleaker because fragility of local governments is present in many ways. Municipalities are characterized by their lack of institutional capacities to provide public goods and services, shortage of financial resources, limited periods of government, and lack of professional public servants. The current institutional design favors that all local actors (mayors, council members, officials, and even citizens) are averse to cooperation dynamics and are generally not willing to build sustained and committed public policies (Arellano Gault, et al. 2011) . Municipalities are responsible for guaranteeing the continuity of public services such as water, sewage, garbage collection, sanitation of public spaces, and monitoring and enforcing social Accepted Article distancing measures; in-home quarantines, cancellation of massive events, and in some cases the transportation of medical personnel. Other actions vary according to the size and resources available to the municipality. In health matters, municipalities are restricted to preventive issues. However, some generalized actions by municipal governments include the dissemination of information. For example, some urban cities carry out information campaigns about forms of COVID-19 contagion, emergency telephones, available hospitals, and other measures undertaken by different levels of government. Many municipalities are distributing masks or antibacterial gel in public spaces. Also, cities such as the municipality of Centro in Tabasco placed thermostatic arches to detect fever in citizens. Medium-sized local governments show coordinated care strategies with state governments to complement their technical capacities. For instance, Aguascalientes established an emerging plan aimed at reviving the local economy. The first measures focus on discounts and extensions of tax payments such as property taxes, and fees for markets, sanitary landfills, and parking services; or pay deferment for licenses such as the sale of alcohol. This municipality also requested loans to development banks to support local entrepreneurs by providing soft loans. In alliance with the private sector, it created a digital business directory to form production chains and online training. Also, the third group of measures is food support programs that provide daily portions of food based on fortified soybeans and rice in coordination with NGOs. Subnational governments of higher technical and financial capabilities have used information technologies, innovation in services and processes, and intersectoral collaboration. For example, Mexico City established programs to support the local economy through various actions such as loans. It also created the MERCOMUNA Program in coordination with Accepted Article "alcaldias" (small local governments) for the biweekly delivery of vouchers, which could be exchanged in food markets, bakeries, and grocery stores. On the other hand, support is also provided to people who live, transit, or temporarily live in the city and suffer some type of affectation due to the measures adopted by the COVID 19 contingency, including sex workers. Concerning sanitary measures, Mexico City offers different communication channels like text messages for medical guidance (SMS COVID-19). This system is a first step for identifying suspected cases of COVID-19 and, where appropriate, determines who should be tested. Also, the city government developed the "CDMX" app that provides information about the available capacity of public hospitals. Due to the distancing measures, the CDMX app has also been used to offer medical consultations by video calls to people with possible symptoms and to follow up on people in quarantine confirmed with the virus. However, not all subnational governments have an easy relationship with the federal government and look for alternative forms of confronting the crisis, like Jalisco state. Despite being the fourth subnational government in terms of the population and size of its economy, Jalisco holds today the 19th place for infections. One factor that explains the temporary results is the early response. The state began cancelling massive events on day 1 of the first confirmed case, the suspension of classes on day 4, the voluntary isolation of the population on day 6, and the request for the cancellation of international flights on day 10. Later, the Jalisco government came into conflict with the federal government because it did not consider the information generated by the federal government timely, the actions implemented for social distancing sufficient, and above all because it considered inappropriate Accepted Article the federal government's screening tests strategy. This constant tension with the federal government encouraged the state government to collaborate with the University of Guadalajara (UdeG), integrating its technical advice in different capacities. The relationship between UdeG and Governor Alfaro originated back in the late 90s since he was elected Mayor of Tlajomulco and appointed several university officials to management positions. With the support of UdeG, the state government installed a "Situation Room" and established advance preventive measures earlier than the federal government. The "Situation Room" developed a theoretical model, different from the "sentinel model" of the federal government, to estimate the rate of increase in the number of COVID-19 cases. The model allowed defining scenarios and establishing measures such as access controls to the Guadalajara metropolitan area, the second largest in the country, and administrative sanctions to people who violated mandatory confinement. Another result of this collaboration has been the "Radar Jalisco" program. Based on the recommendations of the World Health Organization, the program performs as many tests as possible to have a better diagnosis, locate potential outbreaks more effectively, and give epidemiological follow-up to positive cases. Upon the state's request, the University developed an active surveillance model that includes running a call center, which using an algorithm evaluates and determines the severity of cases. The process followed by the system starts from the identification of patients in the call center that can set an appointment for the testing in modules or through a home visit, it also provides follow-ups for patients not meeting the testing criteria. This testing provides results within 72 hours and gives epidemiological monitoring of infected patients. The final results of the program will be seen in the following months; however, Accepted Article as of today, the program allowed testing on a larger scale than what the capacities of the state government would allow. Sub-national governments are decisive in reducing the health crisis severity and will be central to ensure the resilience of local economies. The cases presented here provide an overview of the many actions taken by local public officials innovating within their jurisdictional authority and their limited capacity. Its heterogeneity also characterizes the limited response. While affluent municipalities introduce technological innovations comparable to that of developed countries, small or poor cities struggle to keep service delivery in an unprecedented fiscal crisis. This heterogeneity is associated with usual suspects, such as variations in the size of the jurisdiction and local economy. However, in all the analyzed countries, there is a quick fiscal revenue deterioration, which will ultimately limit local governments' capacity to innovate and take action to solve the imminent economic crisis. The difficulties for innovating and providing a coordinated response in the cases of the majority of countries are not only explained by the limited capacities at the local level. An essential characteristic of the current environment is related to the high transaction costs created by social and political cleavages between national and subnational governments. These cleavages are reflected in formal and informal institutional arrangements that have their roots in a tradition of strong central governments in both federal and unitary governments. These institutional arrangements complicated the development of intergovernmental relations based on trust. For developed countries, existing literature suggests some elements that can reduce the transaction costs of establishing collaborative efforts. For instance, opportunities for participants to interact face to face, the existence of political homophily among elected or appointed officials, the presence of professional communities of public servants that bridges across jurisdictions, as well as the pre-existence of agreements, contracts, policy networks, or even policy forums, all have a strong potential to reduce the transaction costs of collaboration (LeRoux, Brandenburger Moreover, in all these countries, their national governments are relatively newly elected since none of them took office before 2018. In developed countries with stable bureaucracies, the combination of these two factors would not be a significant issue. However, given the turnover of top positions in national bureaucracies, the transaction costs of establishing collaborative agreements with subnational governments tend to increase significantly. For instance, for national public officials, it is complicated to identify partners in subnational governments and to develop trustworthy relationships with them if they remain characterized by a lack of professionalism. Moreover, the centralist tradition and the resources and information asymmetries make it difficult for local officials to trust the behavior of national-level officials. An example of this lack of trust is the fact that many subnational governments established stronger actions than national governments and often earlier too. The cases of Argentina and Chile provide examples of developing practices that can increase trust between levels of government. In both cases, the national government, either by choice or political pressure, provides platforms for direct communication with local authorities. In the case of Chile using existing channels like associations of mayors and in Argentina by the unprecedented face to face virtual meeting between the presidents and local authorities. Furthermore, in these two countries and in Colombia, governments modified institutional arrangements to give more power to municipalities. This decision created a credible commitment, reducing transaction costs by making national authorities more trustworthy partners in the eyes of local officials. Moreover, the case of Medellin exemplifies how a more professional bureaucracy took a more collaborative approach with the national government. A second lesson is how subnational and local governments create local partnerships to deal with the pandemic. In the case of Jalisco (Mexico) and the Santa Catarina Consortium (Brasil), local governments rely on already established relationships to combine and share resources. The role of municipal associations in Chile is also an example of how established relationships are utilized as forums to share experiences and knowledge about local practices. But more importantly, these partnerships are used as instruments to gain scientific and technical legitimacy vis a vis central government. In this context, the associations of municipalities seem to reduce some transaction costs, at least those related to identifying reliable partners for initiating new collaborations. Without question, the remaining part of the public health crisis and the future economic recession will be the hardest part of the COVID-19 pandemic. In defining the strategies for these future challenges, public servants from national and subnational governments, must acknowledge that collaborative and coordinated actions will be crucial to success. Hence, countries need to Accepted Article start adjusting their institutional arrangement to reduce transaction costs for collaboration by creating a more equal distribution of power and more homogeneous capacities between different levels of government. These institutions will also require a better allocation of financial resources and even capabilities and authorities to collect revenues and levy taxes. Moreover, local governments will more than ever be in need to invest heavily in existing and new associations, both profit and nonprofit. National governments will need to acknowledge that for local government to be more effective and efficient partners in their new responsibilities, they must help to develop local professional bureaucracies, particularly in less affluent municipalities. Collaboration and coordination will require professional public servants isolated from political pressures and technically proficient to be considered trustworthy partners. These bureaucracies will need to be more insulated from political pressures and trusted by the citizens they serve and by partners that could contribute to face the new challenges ahead. More than with any other crisis, in confronting the COVID-19 pandemic, without a homogenous response, the health and the next economic recession will be devastating for social equity. This article is protected by copyright. All rights reserved. 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This article is protected by copyright. All rights reserved. This article is protected by copyright. All rights reserved.