Bad weather equal bad government?

The latest edition of The Economist summarizes Leeson and Sobel paper on corruption and weather;

“According to a new paper by Peter Leeson and Russell Sobel of West Virginia University, natural disasters not only wreck property and disrupt lives, but also encourage graft. The academics compared the rate at which public officials were convicted for corruption in different states with the geographical distribution of natural disasters. Their correlation was striking. States which see lots of disasters, such as Mississippi, Florida and South Dakota, are also the most corrupt.

That link, reckon the authors, is not spurious. When disasters occur, the federal government dispenses large dollops of cash in affected areas through FEMA, the Federal Emergency Management Agency. A windfall of federal cash spawns graft in much the same way that oil wealth or foreign aid can cause corruption in poor countries. States with bad weather get more frequent gobs of FEMA cash and hence are more corrupt.

Help from FEMA encourages graft in many ways. Public officials can embezzle cash directly; they can overstate peoples' damage claims in return for a bribe, or demand kick-backs for rebuilding contracts. All told, the impact is big. The authors' calculations suggest that in the average state, an extra $1 per person in money from FEMA increases corruption in that state by 2.5%. Eliminating FEMA relief entirely would cut corruption by more than 20% in the average state. But don't hold your breath.”


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This page contains a single entry by Paul published on August 31, 2006 3:18 PM.

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