We find that Hurricane Katrina had lasting impacts on Louisiana’s formal institutions. In the post-Katrina period, we find that actual Louisiana had persistently higher economic freedom scores for both GE [government employment] and PT [property tax] than the synthetic Louisiana that did not experience the hurricane. These findings imply that the hurricane led to a reduction in both PTs and GE, which indicates a decrease in the relative size of the public sector as a share of the state’s economy.
That is from a new paper by Veeshan Rayamajhee, Raymond J. March, and Corbin C.T. Clark, via the excellent Kevin Lewis.
The post Did Katrina boost freedom, wreck state capacity, or both? appeared first on Marginal REVOLUTION.
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