The Impact of Fiscal Crisis on Decision‐Making Processes in European Governments: Dynamics of a Centralization Cascade

Abstract

Abstract The Great Recession resulted in fiscal crises for governments across the Western world. Significant cuts in government programs were initiated as many governments scrambled to reduce their growing budget deficits. This article explores how European governments reacted during the recent crisis. In particular, the authors focus on the interlinkages between shifts toward more centralized decision making. The article uses a survey of thousands of public sector executives in 17 European countries. The authors find evidence of a centralization cascade, such that centralizing one element of the decision‐making process leads to greater centralization throughout the system. Results also show that having a high number of organizational goals and facing clear sanctions for failing to achieve goals lead to greater centralization, but greater organizational commitment reduces the need to centralize .