The Political Economy of FEMA Disaster Payments

Abstract:     
We find that presidential and congressional influences affect the rate of disaster declaration and the allocation of FEMA disaster expenditures across states. States politically important to the president have a higher rate of disaster declaration by the president, and disaster expenditures are higher in states having congressional representation on FEMA oversight committees. Election year impacts are also found. Our models predict that nearly half of all disaster relief is motivated politically rather than by need. The findings reject a purely altruistic model of FEMA assistance and question the relative effectiveness of government versus private disaster relief.

Keywords: FEMA, government failure, election year, private diaster relief, Red Cross

JEL Classification: D7, H5

Accepted Paper Series