November, 2008

Weathering Corruption

  • Peter Leeson

    Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics
  • Russell Sobel

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In this journal article published in the Journal of Law and Economics, Drs. Leeson and Sobel examine whether bad weather could be responsible for U.S. corruption. Natural disasters create resource windfalls in the states they strike by triggering federally-provided natural disaster relief. Like windfalls created by the "natural resource curse" and foreign aid, disaster relief windfalls may also increase corruption. They investigate this hypothesis by exploring the effect of FEMA-provided disaster relief on public corruption. The results support their hypothesis. Each additional $1 per capita in average annual FEMA relief increases corruption nearly 2.5 percent in the average state. Eliminating FEMA disaster relief would reduce corruption more than 20 percent in the average state. Their findings suggest that notoriously corrupt regions of the United States, such as the Gulf Coast, are notoriously corrupt because natural disasters frequently strike them.

Read the article at JSTOR or at Professor Leeson's website.

Leeson, Peter and Russell Sobel. "Weathering Corruption." Journal of Law and Economics 51, no. 4 (2008): 667-681.