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Impact of natural disaster on public sector corruption

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  • Eiji Yamamura

Abstract

This paper uses inter-country panel data from 1990 through 2010 to examine how the occurrence of natural disasters affects corruption within the public sector. For a closer analysis, disaster is classified into various categories, including general floods, other floods, tropical storms, other storms, earthquakes, volcanic eruptions, and landslides. Furthermore, this paper explores whether natural disasters have different impacts on corruption levels in developed and developing countries. The study reveals a number of novel findings. (1) Natural disasters that cause substantial damage increase public sector corruption in both developing and developed countries. (2) Natural disasters have a greater impact on public sector corruption in developed countries than in developing countries. (3) In developed countries, natural disaster frequency has a significant impact on the level of corruption. Hence, foreseeable disasters increase corruption in general. In developed countries, an incentive may exist to live within disaster-prone areas because of the potential for disaster compensation payments. Copyright Springer Science+Business Media New York 2014

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  • Eiji Yamamura, 2014. "Impact of natural disaster on public sector corruption," Public Choice, Springer, vol. 161(3), pages 385-405, December.
    • Handle: RePEc:kap:pubcho:v:161:y:2014:i:3:p:385-405
    DOI: 10.1007/s11127-014-0154-6
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    More about this item

    Keywords

    Corruption; Institution; Disasters; Risk; D73; D81; Q54;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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