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Does government ideology shake or shape the public finances? Empirical evidence of disaster assistance

Jeroen Klomp

World Development, 2019, vol. 118, issue C, 118-127

Abstract: This study explores whether the public spending provided in response to a natural disaster is influenced by the political ideology of the incumbent government. We use a global panel of about 90 democratic countries. Political parties have different preferences regarding policies that redistribute income within a country after a natural disaster. The estimates of a dynamic panel model clearly indicate that left-wing governments allocate about 2.8 percent more public support per capita in the aftermath of a disaster than right-wing cabinets do. Besides, cabinets that consist of at least one nationalistic political party provide about 0.9 percent more disaster assistance than other coalitions. One explanation is that natural disasters may reinforce the feelings of voters related to the national identity and domestic solidarity. Finally, it turns out that the ideology effect is most visible in political systems with direct elections as it is easier to target affected voters in these systems.

Keywords: Government ideology; Public spending; Natural disasters (search for similar items in EconPapers)
JEL-codes: E62 H5 Q54 (search for similar items in EconPapers)
Date: 2019
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