Chris Blattman

These weak states of America (aid and corruption edition)

A special treat for my sky-is-falling-from-corruption nemeses.

An excerpt from an ODI briefing paper on risks involved in using cash in humanitarian emergencies:

The largest documented case of fraud in a humanitarian program providing money is from the United States. In the wake of Hurricanes Rita and Katrina, the Federal Emergency Management Agency (FEMA) quickly provided aid through the Individuals and Households Program, which provided money for housing and immediate needs.

As of February 2006 more than 2.6 million payments were made totalling over $6 billion. The US Government Accounting Office estimated $1 billion of these payments were fraudulent from bogus claims and double registration (GAO, 2006).

5 Responses

  1. Corruption exists everywhere in the world, it just varies in the level of its prevalence from one place to the next. Much as we may want to deny it, corruption is like prostitution. There will always be a market for it.
    We can never really be completely free of it, we can only hope to manage it so that it doesn’t get out of hand.

  2. corruption will kill us, its one of the most widespread vices and has led to the stagnation of economies in Africa. sad that the west is not spared either.

  3. Well, lack of proper monitoring mechanism to aid in dispersing AIDS is a sure way of encouraging corruption. A proper thought of mechanism that encourages transparency and accountability should be instituted to ensure intended use is realized.

  4. The excerpt reminds me of this paper:

    Could bad weather be responsible for U.S. corruption? Natural disasters create resource windfalls in the states they strike by triggering federally provided natural-disaster relief. By increasing the benefit of fraudulent appropriation and creating new opportunities for such theft, disaster-relief windfalls may also increase corruption. We investigate this hypothesis by exploring the effect of disaster relief provided by the Federal Emergency Management Agency (FEMA) on public corruption. The results support our hypothesis. Each additional $100 per capita in FEMA relief increases the average state’s corruption by nearly 102 percent. Our findings suggest notoriously corrupt regions of the United States, such as the Gulf Coast, are in part notoriously corrupt because natural disasters frequently strike them. They attract more disaster relief, which makes them more corrupt.

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