How Do Governments Respond after Catastrophes? Natural-Disaster Shocks and the Fiscal Stance
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...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | 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 http://hdl.handle.net/10986/3331 |
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okr-10986-3331 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCESS TO CAPITAL ACCESS TO CREDIT ACCESS TO DEBT MARKETS ACCESS TO FUNDS ACCIDENTS AUTOREGRESSION BANK POLICY BIASES BORROWING BUDGET CONSTRAINT BUDGET DEFICIT BUDGET DEFICITS BUSINESS CYCLE CAPITAL MARKETS CAPITAL STOCK CASH PAYMENTS CD CREDIT CONSTRAINT CREDITS DAMAGES DEBT DEBT BURDEN DEBT BURDENS DEBT INSTRUMENTS DEBT LEVEL DEBT LEVELS DEFICIT FINANCING DEFICITS DEPOSIT DEPOSIT INTEREST DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISASTER MITIGATION DISASTER MITIGATION MEASURES DISASTER REDUCTION DISASTER RELIEF DISASTER RESPONSE DISASTER RISK DOMESTIC DEBT DROUGHTS EARTHQUAKES ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT EMERGENCY RELIEF ENDOGENOUS VARIABLES EXCHANGE RATE EXOGENOUS VARIABLES EXPENDITURE EXPORTS EXTERNAL SHOCKS FAMINES FINANCIAL COSTS FINANCIAL DEVELOPMENT FINANCIAL INSTRUMENTS FINANCIAL MARKET FINANCIAL PRODUCTS FINANCIAL RESOURCES FINANCIAL RISKS FINANCIAL SUPPORT FINANCIAL SYSTEM FISCAL BURDENS FISCAL DEFICIT FISCAL EFFORT FISCAL POLICY FISCAL RESOURCES FLOODS FUTURE RESEARCH GDP GDP PER CAPITA GOVERNMENT BUDGET GOVERNMENT DEBT GOVERNMENT DEFICIT GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT FINANCING GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SPENDING HEDGES HUMAN CAPITAL HURRICANES INCOME INCOME LEVEL INCOME LEVELS INDEBTEDNESS INFLATION INFLATION RATE INITIAL DEBT INSURANCE INSURANCE MARKET INSURANCE MARKETS INSURANCE PENETRATION INSURANCE POLICIES INSURANCE PREMIUM INTEREST COSTS INTEREST PAYMENTS INTEREST RATE INTEREST RATE RISK INTEREST RATES INTERNATIONAL BANK INTERNATIONAL DEBT INTERNATIONAL DEBT MARKETS INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL STATISTICS ISSUANCE LESS DEVELOPED COUNTRIES LEVEL OF DEBT LLC LOW INTEREST RATES MACROECONOMIC CONDITIONS MACROECONOMIC FLUCTUATIONS MACROECONOMIC PERFORMANCE MACROECONOMIC VARIABLE MACROECONOMIC VARIABLES MACROECONOMICS MARGINAL PRODUCT MARKET DEVELOPMENT MIDDLE INCOME COUNTRIES MONETARY FUND MONETARY POLICY MONEY MARKET MONEY MARKET RATE MONEY MARKET RATES MULTIPLIER EFFECT MULTIPLIERS NATURAL CATASTROPHES NATURAL DISASTER NATURAL DISASTERS OPEN ECONOMY OUTPUT LOSS OUTPUT LOSSES PRICE VALUES PRIVATE CREDIT PUBLIC FINANCE PUBLIC FINANCES PUBLIC GOOD PURCHASING POWER PURCHASING POWER PARITY REAL GDP RECEIPTS RECONSTRUCTION RETURN RISK MANAGEMENT RISK MITIGATION RISK PREMIUM SAFETY NETS SOURCES OF FUNDS SOVEREIGN DEBT TAX TAX COLLECTIONS TAXATION TIDAL WAVES TOTAL DEBT VOLCANO WAGES WEALTH WEALTH EFFECT WEALTH EFFECTS |
| spellingShingle |
ACCESS TO CAPITAL ACCESS TO CREDIT ACCESS TO DEBT MARKETS ACCESS TO FUNDS ACCIDENTS AUTOREGRESSION BANK POLICY BIASES BORROWING BUDGET CONSTRAINT BUDGET DEFICIT BUDGET DEFICITS BUSINESS CYCLE CAPITAL MARKETS CAPITAL STOCK CASH PAYMENTS CD CREDIT CONSTRAINT CREDITS DAMAGES DEBT DEBT BURDEN DEBT BURDENS DEBT INSTRUMENTS DEBT LEVEL DEBT LEVELS DEFICIT FINANCING DEFICITS DEPOSIT DEPOSIT INTEREST DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISASTER MITIGATION DISASTER MITIGATION MEASURES DISASTER REDUCTION DISASTER RELIEF DISASTER RESPONSE DISASTER RISK DOMESTIC DEBT DROUGHTS EARTHQUAKES ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT EMERGENCY RELIEF ENDOGENOUS VARIABLES EXCHANGE RATE EXOGENOUS VARIABLES EXPENDITURE EXPORTS EXTERNAL SHOCKS FAMINES FINANCIAL COSTS FINANCIAL DEVELOPMENT FINANCIAL INSTRUMENTS FINANCIAL MARKET FINANCIAL PRODUCTS FINANCIAL RESOURCES FINANCIAL RISKS FINANCIAL SUPPORT FINANCIAL SYSTEM FISCAL BURDENS FISCAL DEFICIT FISCAL EFFORT FISCAL POLICY FISCAL RESOURCES FLOODS FUTURE RESEARCH GDP GDP PER CAPITA GOVERNMENT BUDGET GOVERNMENT DEBT GOVERNMENT DEFICIT GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT FINANCING GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SPENDING HEDGES HUMAN CAPITAL HURRICANES INCOME INCOME LEVEL INCOME LEVELS INDEBTEDNESS INFLATION INFLATION RATE INITIAL DEBT INSURANCE INSURANCE MARKET INSURANCE MARKETS INSURANCE PENETRATION INSURANCE POLICIES INSURANCE PREMIUM INTEREST COSTS INTEREST PAYMENTS INTEREST RATE INTEREST RATE RISK INTEREST RATES INTERNATIONAL BANK INTERNATIONAL DEBT INTERNATIONAL DEBT MARKETS INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL STATISTICS ISSUANCE LESS DEVELOPED COUNTRIES LEVEL OF DEBT LLC LOW INTEREST RATES MACROECONOMIC CONDITIONS MACROECONOMIC FLUCTUATIONS MACROECONOMIC PERFORMANCE MACROECONOMIC VARIABLE MACROECONOMIC VARIABLES MACROECONOMICS MARGINAL PRODUCT MARKET DEVELOPMENT MIDDLE INCOME COUNTRIES MONETARY FUND MONETARY POLICY MONEY MARKET MONEY MARKET RATE MONEY MARKET RATES MULTIPLIER EFFECT MULTIPLIERS NATURAL CATASTROPHES NATURAL DISASTER NATURAL DISASTERS OPEN ECONOMY OUTPUT LOSS OUTPUT LOSSES PRICE VALUES PRIVATE CREDIT PUBLIC FINANCE PUBLIC FINANCES PUBLIC GOOD PURCHASING POWER PURCHASING POWER PARITY REAL GDP RECEIPTS RECONSTRUCTION RETURN RISK MANAGEMENT RISK MITIGATION RISK PREMIUM SAFETY NETS SOURCES OF FUNDS SOVEREIGN DEBT TAX TAX COLLECTIONS TAXATION TIDAL WAVES TOTAL DEBT VOLCANO WAGES WEALTH WEALTH EFFECT WEALTH EFFECTS Melecky, Martin Raddatz, Claudio How Do Governments Respond after Catastrophes? Natural-Disaster Shocks and the Fiscal Stance |
| geographic_facet |
Europe and Central Asia |
| relation |
Policy Research working paper ; no. WPS 5564 |
| 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. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Melecky, Martin Raddatz, Claudio |
| author_facet |
Melecky, Martin Raddatz, Claudio |
| author_sort |
Melecky, Martin |
| title |
How Do Governments Respond after Catastrophes? Natural-Disaster Shocks and the Fiscal Stance |
| title_short |
How Do Governments Respond after Catastrophes? Natural-Disaster Shocks and the Fiscal Stance |
| title_full |
How Do Governments Respond after Catastrophes? Natural-Disaster Shocks and the Fiscal Stance |
| title_fullStr |
How Do Governments Respond after Catastrophes? Natural-Disaster Shocks and the Fiscal Stance |
| title_full_unstemmed |
How Do Governments Respond after Catastrophes? Natural-Disaster Shocks and the Fiscal Stance |
| title_sort |
how do governments respond after catastrophes? natural-disaster shocks and the fiscal stance |
| publishDate |
2012 |
| url |
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 http://hdl.handle.net/10986/3331 |
| _version_ |
1764386808078008320 |
| spelling |
okr-10986-33312021-04-23T14:02:08Z How Do Governments Respond after Catastrophes? Natural-Disaster Shocks and the Fiscal Stance Melecky, Martin Raddatz, Claudio ACCESS TO CAPITAL ACCESS TO CREDIT ACCESS TO DEBT MARKETS ACCESS TO FUNDS ACCIDENTS AUTOREGRESSION BANK POLICY BIASES BORROWING BUDGET CONSTRAINT BUDGET DEFICIT BUDGET DEFICITS BUSINESS CYCLE CAPITAL MARKETS CAPITAL STOCK CASH PAYMENTS CD CREDIT CONSTRAINT CREDITS DAMAGES DEBT DEBT BURDEN DEBT BURDENS DEBT INSTRUMENTS DEBT LEVEL DEBT LEVELS DEFICIT FINANCING DEFICITS DEPOSIT DEPOSIT INTEREST DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISASTER MITIGATION DISASTER MITIGATION MEASURES DISASTER REDUCTION DISASTER RELIEF DISASTER RESPONSE DISASTER RISK DOMESTIC DEBT DROUGHTS EARTHQUAKES ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT EMERGENCY RELIEF ENDOGENOUS VARIABLES EXCHANGE RATE EXOGENOUS VARIABLES EXPENDITURE EXPORTS EXTERNAL SHOCKS FAMINES FINANCIAL COSTS FINANCIAL DEVELOPMENT FINANCIAL INSTRUMENTS FINANCIAL MARKET FINANCIAL PRODUCTS FINANCIAL RESOURCES FINANCIAL RISKS FINANCIAL SUPPORT FINANCIAL SYSTEM FISCAL BURDENS FISCAL DEFICIT FISCAL EFFORT FISCAL POLICY FISCAL RESOURCES FLOODS FUTURE RESEARCH GDP GDP PER CAPITA GOVERNMENT BUDGET GOVERNMENT DEBT GOVERNMENT DEFICIT GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT FINANCING GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SPENDING HEDGES HUMAN CAPITAL HURRICANES INCOME INCOME LEVEL INCOME LEVELS INDEBTEDNESS INFLATION INFLATION RATE INITIAL DEBT INSURANCE INSURANCE MARKET INSURANCE MARKETS INSURANCE PENETRATION INSURANCE POLICIES INSURANCE PREMIUM INTEREST COSTS INTEREST PAYMENTS INTEREST RATE INTEREST RATE RISK INTEREST RATES INTERNATIONAL BANK INTERNATIONAL DEBT INTERNATIONAL DEBT MARKETS INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL STATISTICS ISSUANCE LESS DEVELOPED COUNTRIES LEVEL OF DEBT LLC LOW INTEREST RATES MACROECONOMIC CONDITIONS MACROECONOMIC FLUCTUATIONS MACROECONOMIC PERFORMANCE MACROECONOMIC VARIABLE MACROECONOMIC VARIABLES MACROECONOMICS MARGINAL PRODUCT MARKET DEVELOPMENT MIDDLE INCOME COUNTRIES MONETARY FUND MONETARY POLICY MONEY MARKET MONEY MARKET RATE MONEY MARKET RATES MULTIPLIER EFFECT MULTIPLIERS NATURAL CATASTROPHES NATURAL DISASTER NATURAL DISASTERS OPEN ECONOMY OUTPUT LOSS OUTPUT LOSSES PRICE VALUES PRIVATE CREDIT PUBLIC FINANCE PUBLIC FINANCES PUBLIC GOOD PURCHASING POWER PURCHASING POWER PARITY REAL GDP RECEIPTS RECONSTRUCTION RETURN RISK MANAGEMENT RISK MITIGATION RISK PREMIUM SAFETY NETS SOURCES OF FUNDS SOVEREIGN DEBT TAX TAX COLLECTIONS TAXATION TIDAL WAVES TOTAL DEBT VOLCANO WAGES WEALTH WEALTH EFFECT WEALTH EFFECTS 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. 2012-03-19T18:00:28Z 2012-03-19T18:00:28Z 2011-02-01 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 http://hdl.handle.net/10986/3331 English Policy Research working paper ; no. WPS 5564 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Europe and Central Asia |