Andrew Healy, Loyola Marymount University, and Neil Malhotra, Stanford University | 2009

In our democratic system citizens vote for their representative politicians, elected councils as well their public leaders, governors and governing councils. But what about the perception by citizens of how risks are handled by their leaders and what about citizen’s appreciation of proactive thinking by councillors related to public risks when it comes to voting.

“Do voters effectively hold elected officials accountable for policy decisions? Using data on natural disasters, government spending, and election returns, we show that voters reward the incumbent presidential party for delivering disaster relief spending, but not for investing in disaster preparedness spending. These inconsistencies distort the incentives of public officials, leading the government to underinvest in disaster preparedness, thereby causing substantial public welfare losses.

We estimate that $1 spent on preparedness is worth about $15 in terms of the future damage it mitigates.

By estimating both the determinants of policy decisions and the consequences of those policies, we provide more complete evidence about citizen competence and government accountability.”

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