VWL, insb. Politische Ökonomik und empirische Wirtschaftsforschung

Natural disasters are a challenge for good governance - this is the result of recent research investigating the effects of natural disasters on one important antagonistic force to good governance, public corruption. However, a specific analysis of droughts is so far neglected in this young strand of the literature. This paper fills that gap by analysing the short- and long-term influence of droughts on corruption within a unified panel estimation approach for 122 countries during the years 1985 to 2013. Relying on a meteorological drought index, we show that higher drought exposure is followed by increases in corruption. This effect holds true for subgroups of poor and rich countries although its timing and intensity is different. In addition, we identify drought-induced corruption as a phenomenon of countries yielding high per capita income in the agricultural sector.

In this work, utilizing yearly variation between biological siblings, we test for a correlation between poor child health and adult household financial behavior, i.e. risky asset market participation. Using regression and decomposition techniques, we test if this long reach of child health operates through cognitive and non-cognitive skills. Our results indicate a negative correlation of roughly -4.1 percentage points conditional on demographics and family background. Slightly more than half of this correlation can be explained by differences in cognitive and non-cognitive skills. This work highlights the importance of good child health for adult financial behavior.

Lehrbuch / Textbook