The Unintended Consequences of Post-Disaster Policies for Spatial Sorting

Marcel Henkel, Eunjee Kwon, Pierre Magontier
Authors registered in the RePEc Author Service: Eunjee Kwon (), Pierre Magontier and Marcel Henkel

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft - CRED

Abstract: We provide new empirical and theoretical evidence on the spatial consequences of public policies driven by electoral motives. Using exogenous variation in the timing of natural disasters, we show that hurricanes occurring close to Election Day in the United States lead to increased local post-disaster efforts. These electorally motivated measures lead populations to sort into hazard-prone areas. To comprehend the aggregate implications of this sorting pattern, we introduce the relationship between electoral cycles and public policies in a spatial equilibrium model. These electorally motivated policies generate considerable productivity and output losses without being compensated by aggregate welfare gains.

Keywords: Natural Disasters; Electoral Cycles; Fiscal Policies; Spatial Sorting (search for similar items in EconPapers)
JEL-codes: H7 H84 P48 R12 R13 (search for similar items in EconPapers)
Date: 2022-06
New Economics Papers: this item is included in nep-env and nep-pol
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