Russell S. Sobel

Bio: Russell S. Sobel is an academic researcher from The Citadel, The Military College of South Carolina. The author has contributed to research in topics: Entrepreneurship & Government. The author has an hindex of 36, co-authored 146 publications receiving 5087 citations. Previous affiliations of Russell S. Sobel include College of Charleston & West Virginia University.

The Political Economy of FEMA Disaster Payments

Abstract: A central contribution of public choice theory to the analysis of government activity is in viewing the activities of government, not as determined by some single altruistic dictator, but rather as the result of a process involving individual political agents who react to the incentives they face. Federal disaster relief, administered by the Federal Emergency Management Agency (FEMA), is one activity that is ripe for political influence due to the process of disaster declaration and relief. After a disaster strikes a particular state, the governor makes a request to the president for disaster assistance. Following a governor’s request, the president then decides whether to declare the state or region a disaster area. Only after a disaster has been declared by the president can disaster relief be given. FEMA is in charge of determining the level of relief funding for the area, but additional appropriations are determined by congress in cases requiring large amounts of funding beyond FEMA’s allocated budget. The Act which governs the rules of federal disaster declaration and expenditures gives the president the authority to declare a disaster without the approval of congress.

Public Policy, Entrepreneurship, and Economic Freedom

Abstract: The "entrepreneurial spirit" is something that has long been associated with the driving force behind economic progress and growth. Joseph Schumpeter (1942) stated that the key to the success of markets lies in the spirits of entrepreneurs who persist in developing new products and technologies, through a process he termed as "creative destruction." Kaiser (1990) modeled the entrepreneur on the basis of many historical characterizations, including the Schumpeterian innovator, and concluded that the major characteristics of the entrepreneur--innovator, risk taker, and resource allocator--are complementary and inseparable facets of entrepreneurship. Kirzner (1997) argues that the entrepreneurial discovery process is vital to the effectiveness of markets, where discovery entails entrepreneurs discovering profit opportunities by trial and error. In this same respect, Jenner (1998) models the Schumpeterian entrepreneurial process as a dynamic process in which entrepreneurs search for new combinations of products and production techniques that will lead to increased productivity and economic growth. Knight (1921) views the entrepreneur as the bearer of the uninsurable uncertainty present in the marketplace, with the profit earned being the compensation for bearing this uncertainty. Recently, the conceptual link between entrepreneurship and economic growth has received renewed interest by economists. As argued by Minniti (1999), entrepreneurs are the catalysts for economic growth because they create a networking externally that promotes the creation of new ideas and new market formations. The finding that increased entrepreneurial activity leads to greater economic growth has been well-established at both the national and local levels. For example, Reynolds, Hay, and Camp (1999) show that one-third of the differences in national economic growth rates can be attributed to the level of entrepreneurship in each country. Supporting these findings, Zaeharakis, Bygrave, and Sheperd (2000) study 16 developed economies and find that entrepreneurial activity explains approximately one-half of the differences in GDP growth between countries. More recently, Henderson (2002) shows that entrepreneurs significantly impact economic activity at a more local level through fostering localized job creation, increasing wealth and local incomes, and connecting local economies to the larger global economy. Based on the increasing awareness of the role of entrepreneurs in driving economic growth, state and local economic development efforts have been more heavily directed toward promoting entrepreneurship. These development efforts have mainly focused on reducing the financial constraints that entrepreneurs face--either through preferential loans to new businesses, as those supported by the Small Business Administration, or preferential tax treatment for new or small businesses. One such policy that has recently gained popularity aims to devote public resources toward attracting and building a larger amount of venture capital to encourage entrepreneurial activity. This development strategy is largely based on casual observation that areas with larger amounts of entrepreneurial activity generally tend to also have a larger amount of venture capital. A recent controversial policy alternative has been popularized by Richard Florida (2002) in his book The Rise of the Creative Class. The author proposes that instead of focusing on developing capital inputs, development efforts should be focused toward making areas more attractive to bring in and nourish creative, entrepreneurial individuals. In addition, recent work by Gwartney and Lawson (2002), Farr, Lord, and Wolfenbarger (1998), Gwartney, Lawson, and Holeombe (1999), Cole (2003), and Powell (2003) highlight the role of economic freedom in promoting economic prosperity and growth. The results of this research suggest that policies consistent with expanding the economic freedom of individuals are the cornerstone of successful economic development policy. …

Government's response to Hurricane Katrina: A public choice analysis

Abstract: We use public choice theory to explain the failure of FEMA and other governmental agencies to carry out effective disaster relief in the wake of Hurricane Katrina. The areas in which we focus are: (1) the tragedy of the anti-commons resulting from layered bureaucracy, (2) a type-two error policy bias causing over cautiousness in decision making, (3) the political manipulation of disaster declarations and relief aid to win votes, (4) the problem of acquiring timely and accurate preference revelations, (5) glory seeking by government officials, and (6) the shortsightedness effect causing a bias in governmental decision making.

Are there social limits to adaptation to climate change

Abstract: While there is a recognised need to adapt to changing climatic conditions, there is an emerging discourse of limits to such adaptation. Limits are traditionally analysed as a set of immutable thresholds in biological, economic or technological parameters. This paper contends that limits to adaptation are endogenous to society and hence contingent on ethics, knowledge, attitudes to risk and culture. We review insights from history, sociology and psychology of risk, economics and political science to develop four propositions concerning limits to adaptation. First, any limits to adaptation depend on the ultimate goals of adaptation underpinned by diverse values. Second, adaptation need not be limited by uncertainty around future foresight of risk. Third, social and individual factors limit adaptation action. Fourth, systematic undervaluation of loss of places and culture disguises real, experienced but subjective limits to adaptation. We conclude that these issues of values and ethics, risk, knowledge and culture construct societal limits to adaptation, but that these limits are mutable.