Institutions and the losses from natural disasters

Abstract

Abstract. Natural hazards can be seen as a function of a specific natural process and human (economic) activity. Whereby the bulk of literature on natural hazard management has its focus on the natural process, an increasing number of scholars is emphasizing the importance of human activity in this context. Existing literature has identified certain socioeconomic factors that determine the impact of natural disasters on society. The purpose of this paper is to highlight the effects of the institutional framework that influences human behavior by setting incentives and to point out the importance of institutional vulnerability. Results from an empirical investigation of large scale natural disasters between 1984 and 2004 show that countries with better institutions experience less victims and lower economic losses from natural disasters. In addition, the results suggest a non-linear relationship between economic development and economic disaster losses. The suggestions in this paper have implications for the discussion on how to deal with the adverse effects of natural hazards and how to develop efficient adaption strategies.

The economics of natural disasters in a developing country: The case of Vietnam

“…Several papers investigate the institutional and structural determinants of initial disaster costs (Anbarci, Escaleras, & Register, 2005;Kahn, 2004;Raschky, 2008;Skidmore & Toya, 2007) or of the subsequent impact on the economy (Cavallo, Galiani, Noy, & Pantano, 2009;Noy, 2009). To the best of our knowledge, however, no work has attempted to neither address any of these issues nor answer any of the questions we pose using data from the sub-national level or with a focus on a particular country.…”

Floods and Pestilence: Diseases in Philippine Urban Areas

“…Earlier empirical works also find that social conditions, such as education, reduces the magnitude of disaster impacts (Noy 2009;Raschky 2008;Toya and Skidmore 2007). They assert that individuals with high level of education are better able to make informed decisions, including along ensuring their safety.…”

“…There is a general consensus among existing cross-country empirical studies that a country's level of economic development is inversely related to people's vulnerability to disasters (Anbarci et al 2005;Kahn 2005;Peduzzi 2006;Raschky 2008;Toya and Skidmore 2007). Kahn (2005) asserts that economic development serves as an "implicit insurance" that cushions the adverse disaster impacts on people.…”

“…Social conditions, particularly education, matter more than the level of income in reducing disaster deaths in less affluent countries (Toya and Skidmore 2007), and unplanned and mismanaged urbanization either create or enhance people's vulnerabilities to disaster impacts (Kellenberg and Mobarak 2008). Likewise, there are fewer fatalities among countries with better institutions (Adger 1999;Kahn 2005;Raschky 2008). Yonson et al (2017) find that in the context of the Philippine provinces, poverty and people's exposure matter more than the hazard itself in determining deaths from tropical cyclone disasters.…”

“…In the Economics discipline, there is a growing number of empirical quantitative inquiry on the socioeconomic determinants of disaster impacts on fatalities (such as in Anbarci et al 2005, Kahn 2005, Peduzzi 2006, Raschky 2008, and Toya and Skidmore (2007). There is a general consensus among existing cross-country empirical studies that a country's level of economic development is inversely related to people's vulnerability to disasters (Anbarci et al 2005;Kahn 2005;Peduzzi 2006;Raschky 2008;Toya and Skidmore 2007).…”