Disastrous Discretion - The Nonlinear Political Bias in U.S. Hurricane Relief

Abstract

Previous studies have documented politically motivated favoritism in aid provision and distributive politics. Yet, our lack of understanding when politicians use their discretion in order to pursue political goals impedes efforts to design more efficient public spending. Based on a simple theoretical framework, we analyze federal disaster relief after hurricanes hitting the United States from 1965-2018 using fine-grid wind speed and rainfall data to exploit random variation in storm strength. We find that areas represented by a governor aligned with the president receive more disaster declarations. Our flexible polynomial and semi-parametric regressions show that political influence varies immensely with respect to storm intensity: the relationship is most pronounced for medium-strength storms, exceeding the average effects more than tenfold.