Aid, Natural Disasters And The Samaritan's Dilemma

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Do remittances dampen the effect of natural disasters on output growth volatility in developing countries?

“…Therefore, the effect of past remittances on the magnitude of current disasters is ambiguous. This empirical specification closely follows Raschky and Schwindt (2009) who addressed the issue of whether or not foreign aid contributes to build resilience against future shocks or in contrast, accentuates their vulnerability to future shocks by lowering national incentives to invest in insurance mechanisms and to reinforce ex ante risk preparedness. 19 An alternative way to estimate the parameters is to assume that the data are Poisson distributed and use Poisson regression models.…”

“…Following Kahn (2005) and Raschky and Schwindt (2009) on the determinants of the magnitude of natural disasters, the negative binomial and the Zero Inflated Negative Binomial (ZINB) estimators are used to estimate the impact of international remittance inflows on two disaster variables: the number of people affected and the number of deaths caused by natural disasters. 19 Following Kahn (2005) and Raschky and Schwindt (2009), the count data models include the traditional determinants of natural disasters at the cross-country level. 20 Therefore, the level of per capita income, the population density, the level of a country's elevation from the sea, a time trend, and the full set of continental dummies variables are controlled for.…”

Effects of government flood expenditures: the problem of crowding‐out

“…Furthermore, the Samaritan's Dilemma (defined as exploitation of a donnor due to his inability to commit not to help; Buchanan, ) is relevant in this context. Reflecting on this concept, Raschky and Schwindt (, p. 3) indicate that ‘the anticipation of the [ international ] charity in the case of large‐scale disasters might induce governments to diminish protection’. Similarly, the anticipation of central government disaster aid might diminish self‐protection activities of local governments or communities in general.…”

Economics of Natural Catastrophe Risk Insurance

“…See Kunreuther and Miller (1985) for a discussion on the evolution of disaster relief in the 1980s. See also Raschky and Schwindt (2009) and Jaffee and Russell (2012). exposure and/or purchase proper insurance coverage (Michel-Kerjan and Volkman Wise, 2011).…”