Public Choice

, Volume 161, Issue 3–4, pp 385–405 | Cite as

Impact of natural disaster on public sector corruption

Article
First Online:
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Accepted:

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.

Keywords

Corruption Institution Disasters Risk 

JEL classification

D73 D81 Q54 
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Notes

Acknowledgments

I would like to thank the insightful comments of two anonymous referees and professor William F. Shughart II (editor in chief), which have improved this article considerably. I am responsible for all remaining errors. I gratefully acknowledge financial support from the Japanese Society for the Promotion of Science (Grant-in-Aid for Scientific Research (C): 25380347 (Principal Investigator: Eiji Yamamura)).

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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.Department of EconomicsSeinan Gakuin UniversityFukuokaJapan

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