Disaster Avoidance , Disaster Relief , and Policy Coordination in a Federation

@inproceedings{Wildasin2008DisasterA,
  title={Disaster Avoidance , Disaster Relief , and Policy Coordination in a Federation},
  author={David E. Wildasin},
  year={2008}
}
This paper presents a general equilibrium analysis of disaster policy in a federation. The national government is postulated to offer optimal disaster relief, a policy that creates moral hazards for subnational government and private sector decisionmakers. In equilibrium, subnational governments, which compete for mobile productive resources, choose inefficiently low amounts of costly disaster avoidance expenditures. This is true even when the national government subsidizes these expenditures… CONTINUE READING