Understanding the Economic and Financial Impacts of Natural Disasters

by Charlotte Benson, Edward Clay

Overview

Benson and Clay of the London based Overseas Development Institute were the principal researchers for this three-year study, initiated to investigate the short- and long-term economic and financial consequences of natural disasters and their public policy implications. The study relies in part on in-depth case studies of overalls sensitivity to natural hazards in the island of Dominica, public finance consequences of disasters in Bangladesh, and the economic consequences of climatic change and climatic forecasting in Malawi and southern Africa. The authors argue that natural hazard risk management should be integrated into longer-term national investment and development strategies and the basis for funding risk management plans should be expanded. Annotation ©2004 Book News, Inc., Portland, OR

Product Details

BN ID:	2940000195833
Publisher:	World Bank Publications
Publication date:	02/01/2004
Sold by:	Barnes & Noble
Format:	eBook
File size:	647 KB

Table of Contents

	Preface	vii
	Abbreviations and Acronyms	viii
	Summary	1
1.	Introduction	3
	Objectives	3
	Selection of Countries and Issues for Investigation	4
	Concepts and Definitions	5
	Method of Investigation	6
2.	Disasters and the Macroeconomy	9
	The Dynamic Nature of Vulnerability	9
	Overview of the Factors Determining Vulnerability	15
	Natural Hazards	16
	Economic Structure	17
	Stage of Development	18
	Prevailing Socioeconomic Conditions	19
	The Macroeconomic Impact of Disasters	19
	Lessons Learned	26
3.	Public Finance and Disasters	29
	Background	29
	The Broad Fiscal Impact of Disasters	30
	Disaggregated Reexamination of Public Finances	31
	External Aid	34
	Is Reallocation an Appropriate Solution?	35
	Risk Reduction Activities	38
	Long-Term Policy Consequences of Disasters	39
	Lessons Learned	39
4.	Information on Natural Hazards and Disaster Reduction	43
	Information and Public Action	43
	Hazard Information as a Public Good	43
	Climatic Forecasting in Southern Africa	44
	Tropical Storms	46
	Failures in the Provision of Information as a Public Good	47
	Findings and Conclusions	49
5.	Financing the Cost of Future Disasters	53
	Risk Transfer Tools	53
	Potential Obstacles	54
	Creative Solutions	57
	Promoting Mitigation	58
	Conclusions	59
6.	Findings of the Study and Implications for Policy and Research	61
	Findings	61
	Policy Implications	63
	Directions for Future Research	66
Appendix A.	Dominica: Natural Disasters and Economic Development in a Small Island State	69
Appendix B.	Bangladesh: Disasters and Public Finance	79
Appendix C.	Malawi and Southern Africa: Climatic Variability and Economic Performance	91
	Notes	99
	References	107
	Index	113
	Boxes
2.1	Measuring vulnerability	20
2.2	Saying so does not make it so: poverty reduction strategies	21
2.3	Funding rehabilitation: the implications for long-term growth	24
3.1	Fiscal impacts of drought in Sub-Saharan Africa	31
4.1	Evidence-based volcanology: application of Bayes' rule to the situation in Dominica in 1998	49
5.1	Insuring banana growers against disaster: the WINCROP scheme	56
B.1	Uncertainties in postdisaster economic forecasting in Bangladesh	85
	Figures
2.1	Dominica: real annual fluctuations in agricultural, nonagricultural, and total GDP, 1978-99	10
2.2	Bangladesh: real annual fluctuations in agricultural, nonagricultural, and total GDP, financial years 1965-2000	12
2.3	Malawi: real annual fluctuations in agricultural, nonagricultural, and total GDP, 1980-2001	13
2.4	Southern Africa: cereal production and El Nino events, 1972-99	15