Weathering Corruption

Russ Sobel and I have a new paper forthcoming in the Journal of Law and Economics entitled, "Weathering Corruption." I blogged on a working paper version of this some time ago. The version that will be published has some cool additions/revisions, including an improved estimate of FEMA spending's impact on corruption. Here's the 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 FEMA-provided disaster relief on public corruption. The results support our hypothesis. Each additional $100 per capita in FEMA relief increases the average state's corruption nearly 102 percent. Our findings suggest that 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 making them more corrupt.

Download the full paper here.