Subnational Resilience During Crisis: How Brazilian Municipalities Responded to COVID‐19 and Public Health Budget Cuts

ABSTRACT Concern over democratic resilience has grown in recent years, as observers identify threats including populist leadership, weak institutions, flawed elections, rising inequality, and polarization. Yet many democracies appear more resilient than anticipated. In the face of dual crises—a severe pandemic and austerity‐driven budget cuts—how might democratic regimes promote human development and high living standards? We answer this question by examining the extent to which subnational democracy provides insulation from national crises, drawing on Brazilian municipal responses to the COVID‐19 pandemic and sharp cuts to public health funding. We pose two competing hypotheses: Deterioration —that the pandemic and budget austerity are associated with inferior social outcomes (e.g., rising infant and maternal mortality); and Resilience —that robust local democratic institutions and municipal state capacity would be associated with superior social outcomes during the crises. Through a unique dataset covering Brazil’s 5570 municipalities from 2006—2022, we find evidence of subnational democratic governance generating resilient health outcomes in crisis periods as well as in normal times. Municipalities with three democratic pathways—institutionalized participatory governance, citizenship‐enhancing social programs, and rights‐based state capacity—sustain better performance in infant and maternal health outcomes. These results show that the long, slow construction of subnational democratic institutions can support lower mortality rates and more resilient social performance during periods of national crisis.