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Public Sector Corruption and Natural Disasters: A Potentially Deadly Interaction

  • Monica Escaleras

    ()

    (Department of Economics, Florida Atlantic University)

  • Nejat Anbarci

    (Department of Economics, Florida International University)

  • Charles Register

    (Department of Economics, Florida Atlantic University)

A number of recent studies have, separately, addressed the effects of public sector corruption and natural disasters. In this paper, we intersect these lines of research to assess whether corruption in the public sector plays a role in the havoc wrought by large scale natural disasters, using major earthquakes as the example. We first develop a brief theoretical model of the relation between these two variables and then empirically test the proposition by analyzing 344 major quakes occurring in 42 countries during the 1975 through 2003 period. We use a Negative Binomial estimation strategy that takes into account the endogenous nature of corruption and controls for a number of other factors such as earthquake frequency, magnitude, distance from population centers, and a country’s level of development which have been shown to influence a quake’s destructiveness. The results provide strong evidence that public sector corruption is both positively and significantly related to the death toll a given earthquake takes on a population.

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File URL: http://home.fau.edu/mescaler/web/working%20papers/quakecor8.30.06.pdf
File Function: Revised version, 2006
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Paper provided by Department of Economics, College of Business, Florida Atlantic University in its series Working Papers with number 06005.

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Length: 42 pages
Date of creation: Apr 2006
Date of revision: Aug 2006
Handle: RePEc:fal:wpaper:06005
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  1. Mohsin Habib & Leon Zurawicki, 2002. "Corruption and Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan, vol. 33(2), pages 291-307, June.
  2. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
  3. Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," Public Choice, Springer, vol. 122(1), pages 69-97, January.
  4. Lorenzo Pellegrini & Reyer Gerlagh, 2004. "Corruption's Effect on Growth and its Transmission Channels," Kyklos, Wiley Blackwell, vol. 57(3), pages 429-456, 08.
  5. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
  6. Matthew E. Kahn, 2005. "The Death Toll from Natural Disasters: The Role of Income, Geography, and Institutions," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 271-284, May.
  7. Rodney Ramcharan, 2005. "How Big Are the Benefits of Economic Diversification? Evidence From Earthquakes," IMF Working Papers 05/48, International Monetary Fund.
  8. William Shughart, 2006. "Katrinanomics: The politics and economics of disaster relief," Public Choice, Springer, vol. 127(1), pages 31-53, April.
  9. Danila Serra, 2006. "Empirical determinants of corruption: A sensitivity analysis," Public Choice, Springer, vol. 126(1), pages 225-256, January.
  10. Nejat Anbarci & Monica Escaleras & Charles Register, 2006. "Traffic Fatalities and Public Sector Corruption," Working Papers 06004, Department of Economics, College of Business, Florida Atlantic University, revised Jul 2006.
  11. Gökhan Karahan & R. Coats & William Shughart, 2006. "Corrupt political jurisdictions and voter participation," Public Choice, Springer, vol. 126(1), pages 87-106, January.
  12. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, 1998. "The Quality of Goverment," NBER Working Papers 6727, National Bureau of Economic Research, Inc.
  13. Alesina, Alberto & Weder, Beatrice, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," Scholarly Articles 4553011, Harvard University Department of Economics.
  14. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  15. Mark Skidmore & Hideki Toya, 2002. "Do Natural Disasters Promote Long-Run Growth?," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 664-687, October.
  16. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-63, September.
  17. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
  18. Mo, Pak Hung, 2001. "Corruption and Economic Growth," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 66-79, March.
  19. Bliss, Christopher & Di Tella, Rafael, 1997. "Does Competition Kill Corruption?," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 1001-23, October.
  20. Leamer, Edward E, 1985. "Sensitivity Analyses Would Help," American Economic Review, American Economic Association, vol. 75(3), pages 308-13, June.
  21. Beck, Paul J. & Maher, Michael W., 1986. "A comparison of bribery and bidding in thin markets," Economics Letters, Elsevier, vol. 20(1), pages 1-5.
  22. Lien, Da-Hsiang Donald, 1986. "A note on competitive bribery games," Economics Letters, Elsevier, vol. 22(4), pages 337-341.
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