<p>Despite growing attention, the role of fiscal decentralization (FD) in managing health crises remains inconclusive. The COVID-19 pandemic has underscored the urgency of understanding the impact of FD, bringing this issue to the forefront of research. This paper investigates the effect of FD on the effectiveness of government containment measures in managing the COVID-19 health crisis across OECD countries. Results show that a higher degree of FD is associated with lower effectiveness of government policies in reducing mortality in the first phase of the pandemic. Extended analysis indicates that government containment policies are the primary channel through which FD influences mortality outcomes. Through this channel, the negative effects of FD are significantly more pronounced in countries with higher levels of governance. The first-phase findings highlight the coordination challenges inherent in decentralized systems, which contribute to the reduced effectiveness of crisis management. However, in the second phase, FD demonstrates a positive effect on the effectiveness of vaccination in improving mortality outcomes. This finding highlights the provision efficiency of public goods and services in decentralized systems. Policymakers should carefully consider the nuanced effects of FD when designing strategies for managing future health crises.</p>