Fiscal Decentralization and Natural Disaster Mitigation: Evidence from the United States Academic Article uri icon

abstract

  • How decentralized government structure influences public service delivery has been a major focus of debate in the public finance literature. In this paper, we empirically examine the effect of fiscal decentralization on natural disaster damages across the U.S. states. We construct a unique measure of decentralization using state and local government expenditures on natural resources, which include investment in flood control and mitigation measures, among others. Using statelevel panel data from 1982 to 2011, we find that states that are more decentralized in natural resource expenditures have experienced more economic losses from floods and storms. This effect is only pronounced in states that are at higher risks of flooding. Our findings suggest that fiscal decentralization may lead to inefficient protection against natural disasters and provide implications for the assignment of disaster management responsibilities across different levels of government in the U.S. federal system.

published proceedings

  • PUBLIC BUDGETING AND FINANCE

altmetric score

  • 0.5

author list (cited authors)

  • Miao, Q., Shi, Y. u., & Davlasheridze, M.

citation count

  • 15

complete list of authors

  • Miao, Qing||Shi, Yu||Davlasheridze, Meri

publication date

  • March 2021

publisher