Disasters and corruption: An Empirical Analysis of 16 countries from Asia and the Middle East

Abstract

Disasters and disaster risks may induce corruption in a country, aggravating the number of deaths and damages while reducing a country's adaptive capacity. Within this framework, our study explores the impact of natural and man-made disasters on corruption. Utilising information from the Political Risk Services (PRS) group and other nationally representative sources, we construct a panel dataset to study the effect of disasters and disaster risk on corruption in 16 Asian and Middle Eastern countries from 1984 to 2018. We estimate the Panel OLS Model, as well as the 2SLS Model. For robustness checks, we run the Panel Ordered Logistic Regression (POLR) and Panel Ordered Probit Regression (POPR) models on the dataset. Our study finds that natural and man-made disasters and disaster risks increase the propensity for corruption in the sample countries. Other key findings of the study reveal that business activities, government stability, national income, and education reduce the likelihood of corruption in our sample countries. Lastly, our findings suggest a higher likelihood of corruption in developing countries. Results from our study support the notion that disasters generate a series of resource windfalls that governments and elites may misuse while increasing petty corruption through bribery and extortion.