COVID‐19 has revealed the policy capacity of some governance institutions, both resilience and vulnerability. Hence, this circumstance has demanded public administration scholars and practitioners to rethink the existing governance practices, particularly in making effective crisis‐related policies. This paper reviewed primary and secondary studies exploring the application of policy capacity competencies in facilitating COVID‐19 handling in Asia. In achieving so, we did a systematic literature review of relevant studies published between January and October 2020. Applying the agreed search term to several databases, we found 2541 studies, while merely 30 were included for review. Findings from the studies are predominantly closely linked to operational capacity (n = 21). Other studies are related to political and analytical capacity (n = 14 and 7, retrospectively). We found that there are some dilemmas and inadequacy of understanding concerning the role of features in certain capacities (such as technology use versus individual privacy, the paradox of trust and legitimacy, or centralisation versus decentralisation), particularly in the time of crisis, which is a calling for future research. [ABSTRACT FROM AUTHOR]