The Reallocation of District-Level Spending and Natural Disasters : Evidence from Indonesia
This paper combines district-level government spending data from Indonesia and natural disaster damage indices to analyze the extent to which districts are forced to reallocate their expenditures across categories after the incidence of floods, ear...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/837261520342513596/The-reallocation-of-district-level-spending-and-natural-disasters-evidence-from-Indonesia http://hdl.handle.net/10986/29425 |
| Summary: | This paper combines district-level
government spending data from Indonesia and natural disaster
damage indices to analyze the extent to which districts are
forced to reallocate their expenditures across categories
after the incidence of floods, earthquakes, and volcanic
eruptions. The results reveal that district government
spending is quite sensitive to the incidence of natural
disasters at the local level. In the case of floods,
districts reallocate spending away from the category of
general administration to sectors such as health and
infrastructure. Moreover, volcanic eruptions seem to lead to
less investment in durable assets both in the year of the
disaster as well as the following year. Overall, these
results highlight the potentially useful role of a national
disaster risk financing insurance program toward maintaining
a relatively stable level of district-level spending in
different sectors. |
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