The overprotective parent - Bureaucratic agencies and natural hazard management

Due to the public good character of protective measures against natural disasters events, their allocation is very often in the realm of bureaucratic and expert agencies. Based on the economic theory of bureaucracy the behaviour of a bureau providing the good "protection against natural hazards" is analysed. The existing model is extended by further institutional constraints accounting for societal control mechanisms. The main proposition is that the allocation of protective measures through natural-hazard-management-agencies does also result in cost and allocative inefficiencies, however, the amount of allocative inefficiencies is relatively higher as compared to a normal bureau. This is mainly due to the potential of blame-shifting from politicians to bureaucrats. The considerations made in this paper can help to design a more efficient institutional framework in societal natural hazard management.Theory of bureaucracy, natural hazards, blame

Blame-Games, the Media and Discretionary Behaviour of Bureaucrats

This paper investigates the negative effect of media reports on the provision of public goods by bureaucratic agencies. I provide a simple career concerns model where negative publicity in the media can affect the bureaucrat's future wage. The proposition of the model is tested using data of the U.S. Army Corps of Engineers' spending on flood protection from 1968-2008.Theory of Bureaucracy, Blame-Shifting, Natural Hazards

Foreign Aid and Enlightened Leaders

To study whether foreign aid fuels personal, regional and ethnic favoritism, we use satellite data on nighttime light for any region in any aid-recipient country, and we determine for each year and each country the region in which the current political leader was born. Having a panel with 22,850 regions in 91 aid recipient countries with yearly observations from 1992 to 2005, we compare the effect of foreign aid on nighttime light across regions. We find that in countries with poor political institutions, this effect is significantly higher in the region in which the current political leader was born than in other regions. This finding suggests that a disproportionate share of foreign aid ends up in the leader's birth region, and we argue that it supports the view that foreign aid fuels favoritism, broadly defined. We find no such difference in aid-recipient countries with sound political institutions.Foreign aid; Political leaders; Favoritism; Political institutions

Value-at-risk of carbon constraints : an input oriented approach of resource scarcity

The purpose of this study is to broaden the discussion on corporate enviromental risk exposure by integrating an oil scarcity factor. This broader approach can be utilized as a means of instigating a discussion on carbon risks beyond output oriented adaption and mitigation strategies. Even though the outcomes might not seem to be relevant for current economic activities, the recent discussion about oil prices affecting the global economy illustrates the future relevance of this topic; it is just a matter of time before risks related to future oil supply and endowment will emerge. --

Media, Democracy, and Government Action: Prevention vs. Palliation in the Time of Cholera

This paper studies how media and democracy influence government action taken before and after a natural disaster. The key elements in this relationship are the media's role as the provider of information to voters about government actions and the quality of democracy that pertains to how relevant election results are. We show that more media activity and more democratic institutions both contribute positively to the government's palliative effort after the disaster. However, the effects of media and democracy on the government's preventive effort before the disaster are negative. We provide empirical evidence based on major cholera epidemics around the world, which lends some support to these hypotheses.

On the Channel and Type of Aid: The Case of International Disaster Assistance

The aim of this paper is to determine the drivers of a donor’s decision on the composition of aid. We apply a dataset on international post-disaster assistance between 2000 and 2007 that includes information on the channel (bilateral vs. multilateral) and type (cash vs. in-kind) of each aid flow. Our results suggest that the choice of the channel and type of disaster assistance is mainly determined by strategic interests and transaction costs. Moreover, we find differences in the allocation behavior of OECD and non-OECD countries.Foreign aid, natural disasters, bilateral vs. multilateral, type of aid

On the channel and type of international disaster aid

Research suggests that a donor country’s decision to provide post-disaster assistance is not only driven by the severity of a disaster and the resulting humanitarian needs in the recipient country, but also by strategic considerations. The authors argue that the identification of the determinants of the size of disaster assistance is a first step in the analysis of the donor’s behavior. Since all aid is not motivated by the same reasons, the evaluation of the donor country’s behavior requires a second step accounting for the type and the channel of aid provided. Using data on international disaster assistance between 2000 and 2007, the analysis examines both the donor countries'decision on the channel (bilateral versus multilateral) and the type of disaster relief (cash versus in-kind). The empirical results suggest that international disaster relief is not as much driven by the needs of the recipient country, but also by strategic interests (for example, oil or trade relationships) of the donor country. Bilateral and cash transfers are used as a vehicle to signal strategic interests, while multilateral and in-kind transfers are chosen to control for misuse in badly governed recipient countries.Hazard Risk Management,Natural Disasters,Gender and Health,Development Economics&Aid Effectiveness,Governance Indicators

Aid, natural disasters and the samaritan's dilemma

This paper discusses the impact of foreign aid on the recipient country's preparedness against natural disasters. The theoretical model shows that foreign aid can have two opposing effects on a country's level of mitigating activities. In order to test the theoretical propositions, the authors analyze the effect of foreign aid dependence on ex-ante risk-management activity proxied by the death toll from major storms, floods and earthquakes occurring worldwide between 1980 and 2002. They find evidence that the crowding-out effect of foreign aid outweighs the preventive effect in the case of storms, while there is mixed evidence in the case of floods and earthquakes.Natural Disasters,Hazard Risk Management,Disaster Management,Population Policies,Post Conflict Reconstruction

Foreign Aid and Enlightened Leaders

To study whether foreign aid fuels personal, regional and ethnic favoritism, we use satellite data on nighttime light for any region in any aid-recipient country, and we determine for each year and each country the region in which the current political leader was born. Having a panel with 22,850 regions in 91 aid recipient countries with yearly observations from 1992 to 2005, we compare the effect of foreign aid on nighttime light across regions. We find that in countries with poor political institutions, this effect is significantly higher in the region in which the current political leader was born than in other regions. This finding suggests that a disproportionate share of foreign aid ends up in the leader's birth region, and we argue that it supports the view that foreign aid fuels favoritism, broadly defined. We find no such difference in aid-recipient countries with sound political institutions.