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Myopic Voters and Natural Disaster Policy

  • ANDREW HEALY (a1) and NEIL MALHOTRA (a2)
Abstract

Do voters effectively hold elected officials accountable for policy decisions? Using data on natural disasters, government spending, and election returns, we show that voters reward the incumbent presidential party for delivering disaster relief spending, but not for investing in disaster preparedness spending. These inconsistencies distort the incentives of public officials, leading the government to underinvest in disaster preparedness, thereby causing substantial public welfare losses. We estimate that $1 spent on preparedness is worth about $15 in terms of the future damage it mitigates. By estimating both the determinants of policy decisions and the consequences of those policies, we provide more complete evidence about citizen competence and government accountability.

Copyright
Corresponding author
Andrew Healy is Assistant Professor of Economics, Loyola Marymount University, 1 LMU Drive, University Hall 4229, Los Angeles, CA 90045 (ahealy@lmu.edu).
Neil Malhotra is Assistant Professor of Political Economy, Stanford Graduate School of Business, Stanford University, 518 Memorial Way, Stanford, CA 94305 (malhotra_neil@gsb.stanford.edu).
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