Who'd have guessed that FEMA's funds would have been spent in a shady manner after Hurricanes Katrina and Rita? Oh, that's right...anyone with a mindset towards political economy and incentives. Russell Sobel looked at the issue well before the Katrina disaster, and I think everyone has been forced to admit to some degree that FEMA simply can not work as an emergency relief organization.My favorite items? A sex change operation, Girls Gone Wild videos and Dom Perignon.
An article is here. Here's another.
2 comments:
How would institutions handle the situation differently in a purely free market situation?
Private charity has a large incentive to make sure that the funds they allocate don't end up double paying for housing and giving out funds to "victims" who don't need it.
How would the donation stream for Red Cross change if it were their name in the title instead of FEMA?
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