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Aid, natural disasters and the samaritan's dilemma


Policy research working paper 4952:

This paper discusses the impact of foreign aid on the recipient country's preparedness against 'natural' disasters. The theoretical model shows that foreign aid can have two opposing effects on a country's level of mitigating activities. In order to test the theoretical propositions, the authors analyze the effect of foreign aid dependence on ex-ante risk-management activity proxied by the death toll from major storms, floods and earthquakes occurring worldwide between 1980 and 2002. They find evidence that the crowding-out effect of foreign aid outweighs the preventive effect in the case of storms, while there is mixed evidence in the case of floods and earthquakes.

Keywords

  • Themes:Economics of DRR
  • Hazards:Earthquake, Flood

  • Short URL:http://preventionweb.net/go/10355

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