The Impact of Political Influence on Appointees: Evidence from the Small Business Administration Disaster Loan Program

Matthew Davis, Mary Eschelbach Hansen and Thomas Husted ()

Southern Economic Journal, 2018, vol. 84, issue 3, 771-785

Abstract: Presidential disaster declarations provide disaster aid through the Federal Emergency Management Agency (FEMA) and are known to be motivated by political factors as well as by need. The extent to which politics influence the Small Business Administration (SBA) disaster declaration decision, made by a presidential appointee, has not been previously measured. We use new data covering 1960–2013 to show that SBA declarations are subject to the same political influences as presidential declarations. Disasters occurring during reelection years, as well as those occurring in electorally important states, are more likely to receive SBA declarations. The effect of politics is stronger in the period prior to the passage of the Stafford Act in 1988, showing that the two types of declarations are substitutes for political purposes.

Date: 2018
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https://doi.org/10.1002/soej.12242

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:84:y:2018:i:3:p:771-785

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