Can extreme rainfall trigger democratic change? The role of flood-induced corruption

Abstract

Citation for published item:hmnD wF rF nd enriD xF nd fhtthryD F F nd lu sogluD wF eF @PHIUA 9gn extreme rinfll trigger demorti hngec the role of )oodEindued orruptionF9D uli hoieFD IUI @QERAF ppF QQIEQSVF Further information on publisher's website: httpsXGGdoiForgGIHFIHHUGsIIIPUEHIUEHRRHEI Publisher's copyright statement: This is a post-peer-review, pre-copyedit version of an article published in Public choice. The nal authenticated version is available online at: https://doi.The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details. AbstractUsing a new dataset of extreme rainfall covering 130 countries from 1979 to 2009, this paper investigates whether and how extreme rainfall-driven flooding affects democratic conditions. Our key finding is that extreme rainfall-induced flooding exerts two opposing effects on democracy. On one hand, flooding leads to corruption in the chains of emergency relief distribution and other post-disaster assistance, which in turn impels the citizenry to demand more democracy. On the other hand, flooding induces autocratic tendencies in incumbent regimes because efficient post-disaster management with no dissent, chaos or plunder might require government to undertake repressive actions. The net estimated effect is an improvement in democratic conditions.

Droughts and corruption

“…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 and Register (2016), and Rahman et al (2017) provide additional confirmation of those results for many countries.…”

“…Escaleras and Register's finding of a long-term disaster-related increase in corruption is robust in a disaggregated analysis of floods and storms, while the effects of earthquakes are insignificant. Rahman et al (2017) examine the impact of extreme precipitation events on the level of corruption (ICRG) in 130 countries during the period 1984-2009. Overall, they do not find a direct effect of their measure of extreme rainfall on corruption.…”

“…First, while four studies of floods find that they raise the level of corruption (Nikolova and Marinov 2017;Yamamura 2014;Escaleras and Register 2016;Rahman et al 2017), somewhat surprisingly the case of droughts has up to now been neglected.…”

“…8 In addition, by simply counting the number of droughts, information on the severity of the recorded events is neglected. Therefore, both Nikolova and Marinov (2017) and Rahman et al (2017) use truly exogenous precipitation measures to instrument flood consequences.…”

“…The inclusion of those variables in the estimation equation likely will lead to downward-biased or insignificant coefficients on the drought variable, because at least part of the drought's effects on corruption are already captured by the coefficients on GDP per capita or population growth. Additional control variables likewise may be endogenous to disaster effects (e.g., democracy; see Rahman et al 2017). In order to capture the true net effect of droughtinduced corruption, the most reliable approach is to conduct a two-way fixed-effects panel estimation excluding possibly endogenous time-variant controls in our baseline analysis.…”