Weathering Corruption

Posted: 26 Aug 2007  

Peter T. Leeson

George Mason University - Department of Economics

Russell S. Sobel

The Citadel - School of Business

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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.

Suggested Citation

Leeson, Peter T. and Sobel, Russell S., Weathering Corruption. Journal of Law and Economics, Vol. 51, 2008. Available at SSRN: https://ssrn.com/abstract=1009909

Peter T. Leeson (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://www.peterleeson.com

Russell S. Sobel

The Citadel - School of Business ( email )

171 Moultrie St.
Charleston, SC 29409
United States

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