Droughts and corruption
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Droughts and corruption Daniela Wenzel1 Received: 29 April 2019 / Accepted: 25 August 2020 © The Author(s) 2020
Abstract Natural disasters are challenges for good governance. That conclusion follows from recent research investigating the effects of natural disasters on one important force hostile to good governance: public sector corruption. However, a specific analysis of droughts is so far neglected in the still-young relevant strand of the literature. The present paper fills that gap by analyzing the short- and long-term influence of droughts on public sector corruption within a unified panel estimation approach for 120 countries during the period 1985–2013. Relying on a meteorological drought measure, the Standardized Precipitation Index, we show that more severe drought exposure is followed by more corruption. The effect holds for subsamples of developing and developed countries. The robustness of the results is supported by a variety of stability tests. Furthermore, we provide initial evidence on the transmission paths of drought-induced corruption, which differ depending on the countries’ level of development. Whereas droughts increase corruption risk in developing countries by triggering significantly larger aid inflows and less democratic accountability and transparency, corruption in developed countries rises as a consequence of governmental drought relief payments. Keywords Drought · Economic development · Institutions · Natural disasters · Public sector corruption · SPI JEL Classification D73 · E02 · Q54 · Q56
Electronic supplementary material The online version of this article (https://doi.org/10.1007/s1112 7-020-00843-0) contains supplementary material, which is available to authorized users. * Daniela Wenzel Daniela.Wenzel@hsu‑hh.de 1
Helmut-Schmidt-University, Holstenhofweg 85, 22043 Hamburg, Germany
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Public Choice
1 Introduction Corruption—“the breaking of a rule by a bureaucrat (or an elected official) for private gain” (Banerjee et al. 2012)—requires at least two preconditions: willingness and opportunity. Both preconditions are present in the case of natural disasters. Natural disasters may increase victims’ propensity to bribe public officials, as Hunt (2007) shows for Peruvian households.1 Furthermore, taxpayer-financed disaster relief payments represent monetary windfalls (e.g., Leeson and Sobel 2008) that give groups and individuals opportunities to compete for shares of them, most likely resulting in more rent-seeking behavior and corruption (Brollo et al. 2013). In addition, natural disasters typically create emergency situations that generate a climate of non-accountability and moral hazard. “Crisis” enables bureaucrats and officials to engage in acts of corruption (Klitgaard 1988). Recent empirical research supplies evidence for the disaster-corruption relationship in the United States (Leeson and Sobel 2008), Vietnam (Nguyen 2017) and flood events in Bulgaria (Nikolova and Marinov 2017). The international analyses of Yamamura (2014), Escaleras an
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