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Weathering Corruption

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  • Peter T. Leeson
  • Russell S. Sobel

Abstract

Could bad weather be responsible for U.S. corruption? Natural disasters create resource windfalls in the states they strike by triggering federally provided natural-disaster relief. By increasing the benefit of fraudulent appropriation and creating new opportunities for such theft, disaster-relief windfalls may also increase corruption. We investigate this hypothesis by exploring the effect of disaster relief provided by the Federal Emergency Management Agency (FEMA) on public corruption. The results support our hypothesis. Each additional $100 per capita in FEMA relief increases the average state's corruption by nearly 102 percent. Our findings suggest notoriously corrupt regions of the United States, such as the Gulf Coast, are in part notoriously corrupt because natural disasters frequently strike them. They attract more disaster relief, which makes them more corrupt. (c) 2008 by The University of Chicago. All rights reserved..

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Bibliographic Info

Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

Volume (Year): 51 (2008)
Issue (Month): 4 (November)
Pages: 667-681

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Handle: RePEc:ucp:jlawec:v:51:y:2008:i:4:p:667-681

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References

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  1. Easterly, William & Baqir, Reza & Alesina, Alberto, 2000. "Redistributive Public Employment," Scholarly Articles 4553013, Harvard University Department of Economics.
  2. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
  3. Edward L. Glaeser & Claudia Goldin, 2006. "Corruption and Reform: Lessons from America's Economic History," NBER Books, National Bureau of Economic Research, Inc, number glae06-1, July.
  4. Russell Sobel & Peter Leeson, 2006. "Government's response to Hurricane Katrina: A public choice analysis," Public Choice, Springer, vol. 127(1), pages 55-73, April.
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Cited by:
  1. Emily Skarbek, 2014. "The Chicago Fire of 1871: a bottom-up approach to disaster relief," Public Choice, Springer, vol. 160(1), pages 155-180, July.
  2. Dong, Bin & Torgler, Benno, 2013. "Causes of corruption: Evidence from China," China Economic Review, Elsevier, vol. 26(C), pages 152-169.
  3. Yamamura, Eiji, 2013. "Impact of natural disaster on public sector corruption," MPRA Paper 49760, University Library of Munich, Germany.
  4. Emily Chamlee-Wright & Virgil Storr, 2010. "Expectations of government’s response to disaster," Public Choice, Springer, vol. 144(1), pages 253-274, July.
  5. Busse, Matthias & Gröning, Steffen, 2011. "The resource curse revisited: Governance and natural resources," HWWI Research Papers 106, Hamburg Institute of International Economics (HWWI).
  6. Coyne, Christopher J., 2011. "Constitutions and crisis," Journal of Economic Behavior & Organization, Elsevier, vol. 80(2), pages 351-357.
  7. Spyros Skouras & Nicos Christodoulakis, 2014. "Electoral misgovernance cycles: evidence from wildfires and tax evasion in Greece," Public Choice, Springer, vol. 159(3), pages 533-559, June.
  8. Yoshito Takasaki, 2013. "Do natural disasters beget fraud victimization?: Unrealized coping through labor migration among the poor," Tsukuba Economics Working Papers 2013-002, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
  9. Monica Escaleras & Charles Register, 2012. "Fiscal decentralization and natural hazard risks," Public Choice, Springer, vol. 151(1), pages 165-183, April.
  10. Emily Chamlee-Wright & Virgil Storr, 2011. "Social capital, lobbying and community-based interest groups," Public Choice, Springer, vol. 149(1), pages 167-185, October.
  11. Spyros Skouras & Nicos Christodoulakis, 2011. "Electoral Misgovernance Cycles: Evidence from wildfires and tax evasion in Greece and elsewhere," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 47, Hellenic Observatory, LSE.
  12. Adriana Cordis, 2009. "Judicial checks on corruption in the United States," Economics of Governance, Springer, vol. 10(4), pages 375-401, November.

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