The Political Economy of FEMA Disaster Payments

Posted: 16 May 2007  

Thomas A. Garrett

Federal Reserve Bank of St. Louis - Research Division

Russell S. Sobel

The Citadel - School of Business

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

Suggested Citation

Garrett, Thomas A. and Sobel, Russell S., The Political Economy of FEMA Disaster Payments. Economic Inquiry, Vol. 41, No. 3, pp. 469-509, July 2003. Available at SSRN: https://ssrn.com/abstract=986364

Thomas A. Garrett

Federal Reserve Bank of St. Louis - Research Division ( email )

411 Locust St
Saint Louis, MO 63011
United States

Russell S. Sobel (Contact Author)

The Citadel - School of Business ( email )

171 Moultrie St.
Charleston, SC 29409
United States

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