On the political economy of allocation of agricultural disaster relief payments: application to Taiwan

This paper examines the importance of political factors in the allocation of agricultural disaster payments as a result of Typhoon Morakot that ravaged Taiwan in 2009. The instrumental variable model was estimated using a unique data set that combines a national administrative profile of the 607,704 recipients of disaster relief payments and the matched weather and geographic information. Results show that the political factor significantly determined the level of disaster relief payments. The incumbent government paid more to the farms located in towns which voted for the incumbent party to a greater extent than they did for the opposition party.