Correction to This Article
An Aug. 25 Federal Page article about an academic study of federal disaster aid incorrectly said that the Mercatus Center is part of George Washington University. It is part of George Mason University.

Weathering Corruption

Friday, August 25, 2006

It's a familiar story line: When federal aid flows into a region devastated by a natural disaster, those charged with disseminating it do not always behave honorably in the chaos.

Is bad weather responsible for U.S. corruption?

Peter T. Leeson and Russell S. Sobel, both economics professors at West Virginia University, say that "indirectly at least, the answer may be yes," but the real culprit is the aid.

"States that experience more frequent and severe natural disasters attract larger quantities of FEMA disaster relief. This relief creates a resource windfall that increases public corruption," the two wrote in a 28-page study, published this week by the Mercatus Center at George Washington University.

Official bribes, embezzlement, and the steering of contracts to friends or in exchange for kickbacks are common in times when a premium is placed on getting money to a disaster zone quickly, rather than on monitoring how it is spent, the economists wrote.

Leeson and Sobel examined a decade's worth of public corruption data for the 1990s compiled by the Justice Department's Public Integrity Section. They found that Louisiana was the most corrupt state, with an average of 0.85 annual corruption-related convictions per 100,000 residents. New Hampshire was the least corrupt, with 0.07. (The national average was 0.31.)

The economists also looked at Federal Emergency Management Agency disaster-relief payments for the decade, and performed a statistical regression analysis to see whether there was any relationship between such payments and bad behavior.

They concluded that there was. Every additional $1 per capita spent on federal disaster relief increases corruption nearly 2.5 percent in the average state, they wrote. Some of the worst corruption was in Louisiana, Mississippi and Florida.

"Our findings suggest that notoriously corrupt regions of the United States, such as the Gulf Coast, are notoriously corrupt because natural disasters frequently strike them," the authors wrote. "They attract more disaster relief making them more corrupt."

Their solution: Eliminate FEMA relief, which they say would reduce corruption more than 20 percent in the average state.

Paul C. Light, a professor of government at New York University, said that solution seems rather draconian, and in any case, he is not persuaded by the argument. "Maybe natural disasters strike them because they're corrupt -- same logic," Light said, referring to the Gulf Coast states. "I'd like to see some evidence."

-- Christopher Lee

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