How Do Governments Respond after Catastrophes? Natural-Disaster Shocks and the Fiscal Stance

Melecky, Martin; Raddatz, Claudio

dc.creator	Melecky, Martin
dc.creator	Raddatz, Claudio
dc.date	2012-03-19T18:00:28Z
dc.date	2012-03-19T18:00:28Z
dc.date	2011-02-01
dc.date.accessioned	2023-02-17T20:54:36Z
dc.date.available	2023-02-17T20:54:36Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110207134355
dc.identifier	http://hdl.handle.net/10986/3331
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244257
dc.description	Natural disasters could constitute a major shock to public finances and debt sustainability because of their impact on output and the need for reconstruction and relief expenses. This paper uses a panel vector autoregressive model to systematically estimate the impact of geological, climatic, and other types of natural disasters on government expenditures and revenues using annual data for high and middle-income countries over 1975-2008. The authors find that, on average budget, deficits increase only after climatic disasters, but for lower-middle-income countries, the increase in deficits is widespread across all events. Disasters do not lead to larger deficit increases or larger output declines in countries with higher initial government debt. Countries with higher financial development suffer smaller real consequences from disasters, but deficits expand further in these countries. Disasters in countries with high insurance penetration also have smaller real consequences but do not result in deficit expansions. From an ex-post perspective, the availability of insurance offers the best mitigation approach against real and fiscal consequences of disasters.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5564
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCESS TO CAPITAL
dc.subject	ACCESS TO CREDIT
dc.subject	ACCESS TO DEBT MARKETS
dc.subject	ACCESS TO FUNDS
dc.subject	ACCIDENTS
dc.subject	AUTOREGRESSION
dc.subject	BANK POLICY
dc.subject	BIASES
dc.subject	BORROWING
dc.subject	BUDGET CONSTRAINT
dc.subject	BUDGET DEFICIT
dc.subject	BUDGET DEFICITS
dc.subject	BUSINESS CYCLE
dc.subject	CAPITAL MARKETS
dc.subject	CAPITAL STOCK
dc.subject	CASH PAYMENTS
dc.subject	CD
dc.subject	CREDIT CONSTRAINT
dc.subject	CREDITS
dc.subject	DAMAGES
dc.subject	DEBT
dc.subject	DEBT BURDEN
dc.subject	DEBT BURDENS
dc.subject	DEBT INSTRUMENTS
dc.subject	DEBT LEVEL
dc.subject	DEBT LEVELS
dc.subject	DEFICIT FINANCING
dc.subject	DEFICITS
dc.subject	DEPOSIT
dc.subject	DEPOSIT INTEREST
dc.subject	DEVELOPING COUNTRIES
dc.subject	DEVELOPMENT BANK
dc.subject	DEVELOPMENT ECONOMICS
dc.subject	DEVELOPMENT POLICY
dc.subject	DISASTER MITIGATION
dc.subject	DISASTER MITIGATION MEASURES
dc.subject	DISASTER REDUCTION
dc.subject	DISASTER RELIEF
dc.subject	DISASTER RESPONSE
dc.subject	DISASTER RISK
dc.subject	DOMESTIC DEBT
dc.subject	DROUGHTS
dc.subject	EARTHQUAKES
dc.subject	ECONOMETRIC ANALYSIS
dc.subject	ECONOMETRICS
dc.subject	ECONOMIC ACTIVITY
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	EMERGENCY RELIEF
dc.subject	ENDOGENOUS VARIABLES
dc.subject	EXCHANGE RATE
dc.subject	EXOGENOUS VARIABLES
dc.subject	EXPENDITURE
dc.subject	EXPORTS
dc.subject	EXTERNAL SHOCKS
dc.subject	FAMINES
dc.subject	FINANCIAL COSTS
dc.subject	FINANCIAL DEVELOPMENT
dc.subject	FINANCIAL INSTRUMENTS
dc.subject	FINANCIAL MARKET
dc.subject	FINANCIAL PRODUCTS
dc.subject	FINANCIAL RESOURCES
dc.subject	FINANCIAL RISKS
dc.subject	FINANCIAL SUPPORT
dc.subject	FINANCIAL SYSTEM
dc.subject	FISCAL BURDENS
dc.subject	FISCAL DEFICIT
dc.subject	FISCAL EFFORT
dc.subject	FISCAL POLICY
dc.subject	FISCAL RESOURCES
dc.subject	FLOODS
dc.subject	FUTURE RESEARCH
dc.subject	GDP
dc.subject	GDP PER CAPITA
dc.subject	GOVERNMENT BUDGET
dc.subject	GOVERNMENT DEBT
dc.subject	GOVERNMENT DEFICIT
dc.subject	GOVERNMENT EXPENDITURE
dc.subject	GOVERNMENT EXPENDITURES
dc.subject	GOVERNMENT FINANCING
dc.subject	GOVERNMENT REVENUE
dc.subject	GOVERNMENT REVENUES
dc.subject	GOVERNMENT SPENDING
dc.subject	HEDGES
dc.subject	HUMAN CAPITAL
dc.subject	HURRICANES
dc.subject	INCOME
dc.subject	INCOME LEVEL
dc.subject	INCOME LEVELS
dc.subject	INDEBTEDNESS
dc.subject	INFLATION
dc.subject	INFLATION RATE
dc.subject	INITIAL DEBT
dc.subject	INSURANCE
dc.subject	INSURANCE MARKET
dc.subject	INSURANCE MARKETS
dc.subject	INSURANCE PENETRATION
dc.subject	INSURANCE POLICIES
dc.subject	INSURANCE PREMIUM
dc.subject	INTEREST COSTS
dc.subject	INTEREST PAYMENTS
dc.subject	INTEREST RATE
dc.subject	INTEREST RATE RISK
dc.subject	INTEREST RATES
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL DEBT
dc.subject	INTERNATIONAL DEBT MARKETS
dc.subject	INTERNATIONAL ECONOMICS
dc.subject	INTERNATIONAL FINANCIAL MARKETS
dc.subject	INTERNATIONAL FINANCIAL STATISTICS
dc.subject	ISSUANCE
dc.subject	LESS DEVELOPED COUNTRIES
dc.subject	LEVEL OF DEBT
dc.subject	LLC
dc.subject	LOW INTEREST RATES
dc.subject	MACROECONOMIC CONDITIONS
dc.subject	MACROECONOMIC FLUCTUATIONS
dc.subject	MACROECONOMIC PERFORMANCE
dc.subject	MACROECONOMIC VARIABLE
dc.subject	MACROECONOMIC VARIABLES
dc.subject	MACROECONOMICS
dc.subject	MARGINAL PRODUCT
dc.subject	MARKET DEVELOPMENT
dc.subject	MIDDLE INCOME COUNTRIES
dc.subject	MONETARY FUND
dc.subject	MONETARY POLICY
dc.subject	MONEY MARKET
dc.subject	MONEY MARKET RATE
dc.subject	MONEY MARKET RATES
dc.subject	MULTIPLIER EFFECT
dc.subject	MULTIPLIERS
dc.subject	NATURAL CATASTROPHES
dc.subject	NATURAL DISASTER
dc.subject	NATURAL DISASTERS
dc.subject	OPEN ECONOMY
dc.subject	OUTPUT LOSS
dc.subject	OUTPUT LOSSES
dc.subject	PRICE VALUES
dc.subject	PRIVATE CREDIT
dc.subject	PUBLIC FINANCE
dc.subject	PUBLIC FINANCES
dc.subject	PUBLIC GOOD
dc.subject	PURCHASING POWER
dc.subject	PURCHASING POWER PARITY
dc.subject	REAL GDP
dc.subject	RECEIPTS
dc.subject	RECONSTRUCTION
dc.subject	RETURN
dc.subject	RISK MANAGEMENT
dc.subject	RISK MITIGATION
dc.subject	RISK PREMIUM
dc.subject	SAFETY NETS
dc.subject	SOURCES OF FUNDS
dc.subject	SOVEREIGN DEBT
dc.subject	TAX
dc.subject	TAX COLLECTIONS
dc.subject	TAXATION
dc.subject	TIDAL WAVES
dc.subject	TOTAL DEBT
dc.subject	VOLCANO
dc.subject	WAGES
dc.subject	WEALTH
dc.subject	WEALTH EFFECT
dc.subject	WEALTH EFFECTS
dc.title	How Do Governments Respond after Catastrophes? Natural-Disaster Shocks and the Fiscal Stance
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	Europe and Central Asia