Disasters: Issues for State and Federal Government Finances
Abstract
Extreme events like hurricanes, earthquakes, or terrorist attacks present major challenges for fiscal systems at all levels of government. Analysts concerned with the fiscal and financial impacts of disasters must attempt to assess the likelihood of rare events of large magnitude such as Hurricane Katrina. Extreme value theory, applied here to flood damage data for Louisiana, offers one promising methodology for this purpose. The experience of Katrina and 9/11 also show that large disasters have large intergovernmental impacts. Individual states could, in principle, engage in more extensive ex ante financial and policy preparations for disasters, including disaster avoidance, but the “revealed institutional structure” exposed by recent experience shows that the US federal system shifts much of the economic incidence of local disasters to the rest of society through intergovernmental transfers. This raises policy questions regarding the assignment of responsibility for disaster avoidance in the US federation. In particular, Federal “ownership” of the consequences of disasters may invite or necessitate new forms of Federal “control” of subnational government.Download Info
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Paper provided by University of Kentucky, Institute for Federalism and Intergovernmental Relations in its series Working Papers with number 2006-07.Length: 35 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:ifr:wpaper:2006-07
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Keywords:This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-10-07 (All new papers)
- NEP-PBE-2006-10-07 (Public Economics)
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Hikaru Ogawa & David Wildasin, 2007.
"Think Locally, Act Locally: Spillovers, Spillbacks, and Efficient Decentralized Policymaking,"
Working Papers
2007-06, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
- Hikaru Ogawa & David E. Wildasin, 2009. "Think Locally, Act Locally: Spillovers, Spillbacks, and Efficient Decentralized Policymaking," American Economic Review, American Economic Association, vol. 99(4), pages 1206-17, September.
- Hikaru Ogawa & David E. Wildasin, 2007. "Think Locally, Act Locally: Spillovers, Spillbacks, and Efficient Decentralized Policymaking," CESifo Working Paper Series 2142, CESifo Group Munich.
- David Wildasin, 2007. "Disaster Policy in the US Federation: Intergovernmental Incentives and Institutional Reform," Working Papers 2007-01, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
- Christos Kotsogiannis & Robert Schwager, 2006.
"Fiscal Equalization and Yardstick Competition,"
Working Papers
2006-15, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
- Christos Kotsogiannis & Robert Schwager, 2006. "Fiscal Equalization and Yardstick Competition," CESifo Working Paper Series 1865, CESifo Group Munich.
- David Wildasin, 2007. "Pre-Emption: Federal Statutory Intervention in State Taxation," Working Papers 2007-05, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
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