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Disastrous Discretion: Ambiguous Decision Situations Foster Political Favoritism

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Abstract

Allocation decisions are vulnerable to political influence, but it is unclear in which situations politicians use their discretionary power in a partisan manner. We analyze the allocation of presidential disaster declarations in the United States, exploiting the spatiotemporal randomness of all hurricane strikes from 1965–2018. We show that biased declaration behavior is not politically affordable if a disaster is either very strong or weak, when relief provision is clearly necessary or not. However, in ambiguous situations, after medium-intensity hurricanes, presidents favor areas governed by their co-partisans. Our nonlinear estimations demonstrate that this hump-shaped alignment bias exceeds average estimates up to eightfold.

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  • Stephan Schneider & Sven Kunze, 2021. "Disastrous Discretion: Ambiguous Decision Situations Foster Political Favoritism," KOF Working papers 21-491, KOF Swiss Economic Institute, ETH Zurich.
  • Handle: RePEc:kof:wpskof:21-491
    DOI: 10.3929/ethz-b-000468932
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    More about this item

    Keywords

    : disaster relief; distributive politics; hurricanes; natural disasters; nonlinearity; party alignment; political inuence; political economy.;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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