Disastrous consequences: the political economy of

disaster risk reduction1

Philip Keefer – DECRG
January 24, 2009

Investments to mitigate disaster risk are often expensive and it is natural to expect that
poor countries, struggling to address mortality risks from many sources, would allocate scarce
resources away from disaster preparedness. However, poverty is only a partial explanation for
why the twenty most deadly disasters over the period 1970-2005 all struck poor countries
(CRED data cited in Kenny 2008). Countries that suffer high rates of disaster mortality also fail
to implement the inexpensive public policies that are critical for disaster preparedness and
response, ranging from early warning systems to regulations that reduce the largest risks in
construction or zoning.2 They also appear to discourage private responses to disaster risk.
Consistent with this, although income per capita is negatively related to earthquake mortality in
the 1525 more severe earthquakes that occurred in richer countries, it is not at all associated with
mortality in the 1504 earthquakes that occurred in poorer countries.
Institutional and political factors help to explain why poverty is not the only important
determinant of disaster mortality. Government incentives to provide the public policies needed
to mitigate disaster risk and damage vary across countries; institutions and politics are the
sources of those incentives. Even the poverty – disaster link is influenced by political incentives:
governments with weak incentives to mitigate disaster mortality tend also to have weak
incentives to pursue policies that accelerate growth and alleviate poverty.
The presence of competitive elections in a country is one potential political institution
that might prod political actors to respond more readily to disaster risk. The evidence provides
some, though not robust support for this conclusion. One reason is that political incentives vary
for reasons that go far beyond elections. In countries with competitive elections, for example,
political actors may confront citizens who are more or less informed about their decisions; and
may be more or less able to make credible political commitments to broad segments of the
population. In countries without competitive elections, leaders may or may not have encouraged
institutionalized ruling parties, bureaucracies, or militaries. When they have, party members,
public officials or the military can take actions without leader approval; career success depends

1 This paper was commissioned by the Joint World Bank - UN Project on the Economics of Disaster Risk
Reduction. We are grateful to Apurva Sanghi, S. Ramachandran, Saroj Jha and seminar participants at the World
Bank for valuable comments, suggestions, and advice. Funding of this work by the Global Facility for Disaster
Reduction and Recovery is gratefully acknowledged. The findings, interpretations, and conclusions expressed in
this paper are entirely those of the author(s).
2 The 2007 cyclone that hit Bangladesh killed fewer than 5,000, compared to the 1991 and 1970 cyclones, which
killed hundreds of thousands. Maryam Gonaraghi, chief of disaster risk reduction at the World Meteorological
Organization in Geneva, attributed this to a new early warning system that relied on 40,000 volunteers with
megaphones, organized by the Red Crescent (not the government) (Source: IRIN, Humanitarian News and
Analysis, UN Office for the Coordination of Humanitarian Affairs, 23 November 2007,
http://www.irinnews.org/PrintReport.aspx?ReportId=75470.)
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less on personal relationships with the leader and more on transparent criteria of the
organization. Such organizations can mobilize more effectively to pursue disaster risk reduction.
The inherent public good characteristics of many disaster risk reduction policies explains
why they are better in some countries than in others. However, disaster risk reduction has
inherent characteristics that uniquely attenuate political incentives to invest in it in any country.
Citizens cannot easily judge the efficacy of risk reduction activities before a disaster actually
happens, nor assess the degree to which prior risk reduction efforts succeeded in limiting damage
in the event of a disaster. Unless disasters are large, citizens assume that public policy failures
explain welfare losses from disaster. They are likely to expel incumbents who preside over
disaster, regardless of prior risk mitigation efforts. Knowing this, politicians have weak
incentives to make investments to offset disaster costs.
Well-known behavioral biases also distort individual responses, wherever those
individuals live, to low probability, high cost risks. Disasters fall in precisely this category: rare,
catastrophic events account for most disaster deaths. The six worst disasters from 1970-2005
accounted for about half of all disaster-related deaths during the period (Kenny 2008). For
example, in 2005, 94,013 people died in disasters ranging from storms and floods to epidemics,
of whom 73,338 perished in a single earthquake. When individuals under-estimate the benefits
of mitigating such risks (for example, when substantial time has passed since the last time a rare,
costly adverse event occurred), they are more likely to oppose the efforts of those politicians
who, recognizing that disaster risk reduction promotes their political survival in the event of
disaster, attempt to undertake cost-effective risk mitigation policies.3
This paper explores the interaction of politics and disaster risk reduction. The first
section explains why private markets are likely to provide too little disaster risk reduction. The
second section explains why risk reduction is politically unattractive in general, no matter what
political system a country has. The remaining sections explore the significant variation in risk
reduction among democracies and among non-democracies. Some democracies are more
vulnerable to political market imperfections, such as imperfect voter information or political
credibility, and offer a correspondingly weaker response to the risk of disaster. Some non-
democracies embrace institutionalized ruling parties, bureaucracies or militaries that facilitate
effective responses to disaster; others do not. New evidence presented here suggests that
although competitive elections may not offer robust protection against disaster mortality,
political market imperfections, particularly the inability of politicians to make credible promises
to citizens, play a large role in disaster risk reduction and response.

Public policy and disaster risk

The incentives of politicians to respond effectively to disaster are of central importance
because of the essential role that public policies – laid down by political decision makers – plays
in disaster risk reduction. Many disaster risk reduction measures have spillover effects or public

3 Behavioral biases can cut both ways, however. While people tend to under-estimate the benefits of mitigating
low-probability, high-risk events when they have little or no experience with the events, when their experience is
recent they tend to over-estimate the benefits of mitigation (see, e.g.., Sunstein, Cass R. and Richard J. Zeckhauser
(2008). “Overreaction to Fearsome Risks.” Harvard Law School Program on Risk Regulation Research Paper No.
08-17.
 3

good attributes that individuals do not internalize. Aggregate individual initiatives to mitigate
disaster risk can therefore add up to more or less than what is good for society as a whole.
Individuals or communities may construct too few levees, when they do not take into
account the flood protection that the levees afford to others; or too many, when they ignore the
effects on communities to which diverted water flows. Private markets can settle on appropriate
building standards, but markets will, and often do, mis-price the value of disaster-proofing
buildings when information about building quality is costly or when they ignore the costs of
building collapse on neighbors. After disasters occur, efforts to replace public goods are at least
as important as individually-targeted relief. A noted aid worker, Frederick Cuny (1999),
described the ideal response to famine as entailing operations that supported markets and
incomes rather than relying on handouts of food. Market support is a public good that
governments are well-positioned to provide, but often, because of distorted political incentives,
do not.
Obstacles to efficient private responses to disaster risk go beyond the standard difficulties
surrounding the private provision of public goods. In the face of low-probability, high-loss
events, individuals may make decisions that diverge substantially from decisions that maximize
their expected utility (Kahneman, et al. 1982). In particular, when they have had no recent
experience with a low-probability, high loss event, individuals are likely to under-invest in
measures to protect against them. For example, even if fully informed about building quality,
buyers may care too little about the benefits of building attributes that protect them against low
probability events. One study in the US shows that if the probability of a disaster falls too low,
individuals simply stop thinking about it (Camerer and Kunreuther 1989). A laboratory
experiment in the US concluded that individuals are unwilling to pay anything for insurance
against low probability events, even if the cost of the event is high (McClelland et al., 1993).
It is not straightforward to link these findings explicitly to individual behavior in disaster-
prone areas. For example, one year after the devastating 1991 cyclone in Bangladesh, Haque
(1995) surveyed 268 Bangladeshi households who resided in the area most exposed to it. All
received early warning of the cyclone and impending tidal surge. Because the last major tidal
surge had occurred 31 years previously, in 1960, however, almost 60 percent of respondents took
no action. Respondents said, “it never happened here – we thought it‟s not going to happen this
time, too” (p. 729). This could indicate a behavioral distortion – not ignorance of the risk, but an
unwillingness to respond to it. It could indicate systematic risk misperception. However, it
could also reflect the lack of credibility of government announcements: some survey
respondents recalled past warnings that turned out to be false alarms.
Transaction costs entailed in risk reduction are a final reason why private responses to
disaster risk could be inefficiently low. It is more costly for insurance companies to offer
insurance against low probability, high loss disasters than against high probability, low loss
events with the same expected loss. This is partly due to greater uncertainties about these
probabilities and losses, which rise with the rarity of the events. However, it is also because
insurance companies incur higher capital costs when they indemnify these risks; to cover these
costs, insurance companies may need to charge premia that amount to several times the value of
expected losses from the insured event (Doherty, et al. 2008, p. 151). Analogous to the peak
load problem in power generation, where costly excess capacity has to be maintained to avoid
brownouts during periods of high demand, insurers must maintain larger capital bases to
maintain creditworthiness when they take on low probability high loss risks than when they
 4

assume high probability low loss risks with the same expected value. Because of the unique
characteristics of disasters, therefore, markets for disaster insurance are shallower than other
insurance markets, even in countries where insurance markets are sophisticated and deep.
The disaster risk reduction measures that private markets are likely to under-provide can
have significant effects on disaster outcomes, depending on the disaster. Early warning systems
are technologically feasible for hurricanes and have a large impact on mortality. Private action is
unlikely to produce early warning systems, however. In contrast, while earthquake prediction is
still in its infancy, better construction significantly reduces building collapse. To the extent that
the buyers or users of buildings are unaware of the earthquake risks arising from construction
quality, government-enforced building codes can be an efficient response to earthquake risk. For
example, Japan adopted stricter building standards in 1981. In the large Kobe earthquake of
1995, those buildings constructed after 1981 were far more likely to survive the earthquake than
older buildings. Reinforced buildings are less likely to collapse but, if constructed badly, more
likely to kill occupants if they do collapse. In 1971, therefore, Japan required beam and column
ductility to reduce the risk of reinforced buildings collapsing; only reinforced buildings
constructed before 1971 collapsed in the Kobe earthquake (Ghosh 1999, reported in Kenny
2008).
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Box 1: Private responses to disaster risk: Bangladesh

Bangladesh is exposed both to occasional hurricane-driven tidal flooding from the Bay of
Bengal and, every year, to flooding of the three major rivers that pass through the country. 80
percent of the country lies on a floodplain; every other year, on average, river-borne flood waters
inundate 20 percent of Bangladesh and every tenth year, 37 percent. Flood waters covered at
least 40 percent of the territory in 1974, 1977, 1985, 1987 and 1988 (Brammer 1990; Haque and
Zaman 1993; Wescoat 1992). Nevertheless, loss of life during the most severe of these floods
(1988) was on the order of 2,400, a fraction of the 70,000 deaths caused by the coastal cyclone in
1985. Why?
One reason is that the regularity and extent of river-flooding has prompted significant
wide-ranging private adaptations that are evident in every aspect of Bangladeshi society, from its
culture to its economy. The silt that regular flooding brings to the fields is a boon to soil fertility
and households have correspondingly shaped their economic activities to flooding, relying on
particular varieties of rice adapted to monsoon and dry conditions (the aus and aman rice
varieties require flood waters according to Paul 1997). Fishing is a significant economic activity
that, similarly, depends on periodic flooding, which provides a breeding ground for river fish.
To mitigate flooding risks, including the risk of death, households construct their homes on
natural levees (bhiti) that are sometimes raised further through additional excavation; they raise
nonmetalled roads (katcha) and the courtyards of schools and mosques to the level of abnormal
floods to use as flood shelters; they build platforms (machans) in abnormal flooding years; and
they purchase boats for transport during the monsoon season (Haque and Zaman 1993).
Cyclones are less susceptible to private initiative to reduce risk: they arrive with less
warning than river flooding, they are far less frequent, and their ferocity defeats adaptation
measures such as the boats and stilted houses used to mitigate the effects of river flooding (the
tidal wave from the 1991 cyclone was 20 feet high). Individual action is less likely against such
disasters, because of behavioral biases against addressing infrequent disasters; it is also less
likely to be effective.

Despite behavioral biases, transaction costs, spillover effects and imperfect information,
there is still substantial scope for private responses to natural hazards. For example, as the
frequency of disaster events rises, behavioral impediments to private disaster risk reduction
should fall. Flood-prone areas tend to experience disasters more often than earthquake-prone
areas and flooding due to seasonal monsoons tends to be more frequent than flooding due to
coastal cyclones and hurricanes. One would therefore expect to see correspondingly greater
private initiatives to counter flood risks against river flooding than tidal flooding and
earthquakes. In response to flood danger, individuals can elevate their homes or build them on
high ground, undertake economic activities that are less sensitive to flooding (rice-growing and
fishing), and invest in transportation methods (boats) suitable for seasonal flooding. Households
can work together to erect small protective embankments around key community or household
assets. Individuals in earthquake-prone areas can build stronger buildings and store supplies in
the event that an earthquake strikes. Households can purchase insurance to smooth consumption
in the event of disaster. In fact, as Box 1 indicates, this pattern is evident in Bangladesh, where
private action is much more evident – and mortality much lower – against the hazard of frequent
and significant river flooding than against infrequent, cyclone-propelled tidal surges.
 6

Unfortunately, government can not only fail to supplement insufficient private disaster
risk reduction, it can also obstruct private initiatives. Government-sponsored risk reduction
certainly affects individual incentives to mitigate. For example, if a government builds large
levees, individuals are more likely to forego flood-proofing and the purchase of insurance. This
could be socially beneficial, for example if public levees mitigate greater risk at lower cost than
the foregone private actions. Often, though, infrastructure responses to disaster risk are not
driven by careful calculations of social costs and benefits.
Weak governance environments also undermine private incentives to undertake disaster
risk reduction. Where governments fail to define or enforce property rights or to defend
contractual obligations, private investments are riskier and collective action by communities
more difficult. These effects extend to private investments to mitigate disaster risk. Individuals
are less likely to flood-proof their home if their rights to the home are insecure; they are less
likely to be able to purchase insurance when insurance regulation is inadequate or when state
institutions provide little assurance that insurance contracts will be enforced.
Evidence using a variety of governance indicators supports the claim that government
policy stances that create an uncertain environment for private actors are associated with higher
disaster mortality. One unit increases in these are associated with average reductions in
earthquake mortality of as much as 33 percent, holding constant earthquake magnitudes and
other factors (Figure 1). Of course, it is unlikely that these effects can be attributed solely to the
influence of governance on private sector decision making. Governance indicators also capture
government policy stances that are more broadly relevant to public sector performance.
Nevertheless, the magnitudes of the effects are revealing.
 7

Figure 1: Percentage drop in earthquake mortality as governance

improves

0%
-10%
-20%
-30%
-40%
-50%
-60%
-70%
-80%
-90%
-100%

Rule of law-PRS Corruption-PRS

Bureaucratic quality-PRS Expropriation risk-PRS
Government effectiveness-WGI Regulatory quality-WGI
Rule of law-WGI Corruption-WGI

Note: Estimates from regressions of earthquake mortality on the different governance variables, controlling for
earthquake magnitude, the log of population, population density, and the share of people residing in urban areas.
Income is causally related to and highly correlated (on the order of .65 - .75) with governance and is excluded. Rule
of law and corruption effects are not robust to inclusion of income/capita; the remainder are. PRS variables are from
the International Country Risk Guide, Political Risk Services; WGI variables are from the Worldwide Governance
Indicators.

The low political rewards to disaster risk reduction

Failures in private markets do not automatically imply that public solutions will improve
outcomes. Whether they do depends on the extent of political market imperfections – the degree
to which political actors have incentives to pursue socially optimal solutions. Unfortunately,
political incentives to respond efficiently to disaster risk are particularly vulnerable to political
market failures. Moreover, public policies that undermine the quality of regulation, the
enforceability of contracts or the security of property rights also cripple private responses to
disaster: private investments to reduce disaster costs are less likely if private investments are
insecure.
The tragedy of the 1991 cyclone in Bangladesh illustrates how limited incentives to
provide public goods undermines even when an important pillar of disaster risk reduction is in
place. benefited from an extensive early warning system. Unfortunately, many residents did not
heed them. The reasons they did not flee, however, are themselves related to public policy
failures symptomatic of systems in which officials have limited incentives to pursue the public
interest. The households either did not hear early warnings (lacking radios – a problem that
public policy can correct); did not believe them (either because government statements were not
 8

credible, because political credibility is low, or because of a lack of education, which

government policy could correct); or are reluctant to evacuate because they feared that their
contractual claims on land (e.g., as sharecroppers) required their continued physical presence on
it – a problem that arises when governments do not define and protect property rights (Haque
1995).
One impediment to private initiative, the behavioral biases of individuals confronted with
low-probability, high-cost events, also impedes government initiatives. If citizens do not view
disaster risk as sufficiently grave to take costly precautionary actions on their own, they are
unlikely to support public policies that compel them to mitigate disaster risk (directly, through
regulation, or indirectly, through higher taxes).
Disaster preparedness is also more vulnerable than other policies to distortions – political
market imperfections – that affect the incentives of government officials. One key imperfection
is incomplete citizen information: when citizens cannot easily observe the effect of government
actions on their welfare, they are less likely to reward governments for positive actions or punish
them for negative. In addition, they are more likely to attribute welfare losses from exogenous
shocks, such as disasters, to failed government policies.4 One consequence of imperfect
information, seen in countries from the US to India, is that citizens are more likely to blame
incumbent governments for welfare losses from disaster, regardless of government policies.
In India, following rain-related disasters citizens tend to vote against politicians from the
incumbent ruling party, even if the government provides large amounts of assistance to farmers.
Relief spending has only a small effect on the probability of expulsion from office (average
spending reduces the probability of expulsion by only one-seventh relative to no spending at all;
Cole, Healy and Werker 2008).
The electoral effects of disasters vary with the magnitude of disaster, further evidence of
the importance of citizen information. In the face of large disasters, citizens should be more
likely to attribute welfare losses to the disaster than to (unobserved) government disaster
policies. If this is the case, government relief efforts following large disasters should have a
stronger effect on their re-election probabilities. Evidence from India supports this claim: for
the most extreme weather events, disaster relief can offset the entire political cost of presiding
over a weather disaster. However, for merely “bad” weather, which also imposes large costs on
farmers, the same level of relief offsets only one-quarter of the political risk (Cole, Healy and
Werker 2008).
Incomplete citizen information also affects the types of disaster policies that governments
undertake. It reduces the political rewards for pursuing disaster risk reduction and the political
penalties for not pursuing it. Building codes, early warning systems, disaster relief planning and
floodplain management are all difficult for citizens to observe. Even if individuals can observe
them, they cannot easily assess the contribution they make to individual welfare until a disaster
occurs. In the case of low-probability disasters, however, such as volcanic eruptions,
earthquakes and tsunamis, or the flooding from 100 year hurricanes, a long lag arises between
when policies are put into place and when citizens observe the welfare benefits they have

4 If they could perfectly observe government policies and the contribution to their welfare, they could easily
distinguish welfare losses due to shocks and those due to inadequate government policies to deal with shocks. When
they are imperfectly informed, they are more likely to conflate the two.
 9

received from them. Citizens may give politicians credit when disaster occurs, but that could be
far in the future and of less political relevance than alternative uses of current resources and
policy effort.
If citizens cannot easily observe disaster risk reduction but immediately observe disaster
relief transfers, and if they tend to under-estimate the contribution that risk reduction makes to
their welfare, political incentives to adopt policies to reduce disaster risks before disasters occur
should be weak. The India experience highlights that even easily observable post-disaster relief
spending has low political payoffs. We can infer from this that the political payoffs to pre-
disaster risk reduction, less easily observed and with benefits further in the future – reservoirs,
for example, or crop insurance – should be even lower.
Evidence from the US supports this inference. Healy and Malhotra (2008) look at US
federal government spending on damage prevention and disaster relief and show that public
policy favors post-disaster relief spending by a large margin: per capita spending on relief was
$34.50 in 2000, compared to $1.59 on prevention. Unfortunately, their estimates also suggest
that this allocation is exactly wrong and that a shift of spending from relief to prevention would
leave society much better off. In 2000, for example, an extra one million dollars in damage
prevention was associated with a reduction in the present value of future disaster damage of
approximately 15 million dollars.5 Political incentives explain this inefficient choice. Unlike
relief spending, investment in prevention has no statistically significant increase on the vote
share of the incumbent president‟s party.
The very distribution of disaster relief underlines the importance of political incentives.
US presidents are far more likely to declare disasters in states that are important to their electoral
chances, making state residents eligible for relief payments from the Federal Emergency
Management Agency (FEMA). American states with legislators sitting on the congressional
committees that oversee FEMA are also significantly more likely to receive FEMA payments.
Political motivations, rather than need, explain nearly one-half of FEMA‟s disaster relief
allocations (Garrett and Sobel 2003). Healy and Malhotra also find that the more supportive that
a region (county) was of the president‟s party in past elections, the more likely that the region
(county) would receive disaster relief. This same variable, though, is not associated with the
allocation of preventive spending, further evidence that prevention is politically less relevant
than relief spending.
Other evidence of the importance of politics in spending on disaster risk reduction comes
from a comparison of the behavior of two types of municipal leaders in the United States:
elected mayors versus city managers appointed by the city council. Raschky and Weck-
Hannemann (2008) conclude that mayors are significantly less likely to agree to adopt and
enforce municipal floodplain management systems in order to participate in the National Flood
Insurance Program. For a variety of reasons, ranging from principal-agent problems that allow
city managers to depart from policies preferred by elected council members to the fact that city
managers are more likely to be evaluated by future employers on the basis of their perceived
competence than on the extent to which they maximized the vote shares of particular council
members, city managers are less exposed than mayors to the political consequences of their

5 Their estimates show that disaster damage falls between one and 1.5 percent with every 10 percent increase in
preventive spending.
 10

disaster decisions. Flood insurance, like other disaster risk reduction investments, is not
politically popular and so is more likely to be undertaken by the public officials least exposed to
political forces.
Citizen disinterest and incomplete information bias the public provision of disaster risk
reduction downwards and towards relief over prevention. They also slant risk reduction policies
towards the (literally) concrete and tangible. Whether in the United States, Bangladesh or
Argentina, the political response to flooding leans to large infrastructure investments
(embankments or levees) designed to prevent the incursion of water rather than policies that
reduce the costs of inundation (Box 2).
An emphasis on infrastructure could be merited if hydrological conditions are stable.
However, if there is considerable uncertainty about the magnitude of future floods, or about the
course of a river, it is correspondingly difficult to design appropriate levees and, because
infrastructure investments are fixed, mistakes are particularly costly to remedy. It could also be
merited if the assets being protected and the costs of relocation are large and adaptation to
periodic inundation is infeasible. The might finally be merited if the collateral costs of
infrastructure development not be too high. These range from economic activities that may be
rendered unviable to ecological and hydrological processes that might be upset, giving rise to
possibly large and often unforeseen environmental costs.
Political incentives often drive infrastructure-based responses to disaster risk reduction
even though none of these conditions is met. Unlike strategies that reduce the damage from
inundation, infrastructure investments are easily observable by beneficiaries and targeted to
favored constituencies. They are also lucrative sources of rents, both from contracts and from
increases in the value of flood-protected land (which are uniformly retained by landowners and
not shared with taxpayers). The political advantages that infrastructure enjoys over land
management exist in all countries; the next section discusses reasons why these advantages
might vary across countries, explaining large variations in both risk reduction policies and
disaster mortality.
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Box 2: Bulldozers and flood risk around the world

Examples from Argentina, Bangladesh and the United States demonstrate the extent of
government preferences for floodplain development and flood control policies predictaed on
structural solutions. The 1983 floods in Argentina hit the town of Resistencia particularly hard.
The floodplain was heavily populated, mostly by poorer residents; 35 percent of the population
occupied illegal dwellings (Gentile 1994, p. 79). Reviewing Argentine policies following
significant flooding in 1983 and 1992, Penning-Roswell (1996) notes substantial efforts at the
federal level to curtail development in floodplains. However, pressures continued to implement
engineering solutions to flood risk reduction and implementation of land use regulations
remained difficult. After the floods, he still observed strenuous efforts by developers in the town
of Goya to protect low-priced floodplain property that they had purchased for low-cost housing
with government-sponsored public works projects.
The World Bank‟s (2006) evaluation of a large ($225 million) Flood Protection Project in
Argentina points to a similar preference for infrastructure. The project‟s structural components
(75 percent of the total loan) were rated satisfactory, as was the project‟s support for subsidies to
assist households to flood-proof their homes. The regulatory aspects of the project, for example
regarding flood plain management, were rated marginally satisfactory. Moreover, the central
aspect of any effective policy aimed at improving adaptation to floods, an early-warning system,
was dropped from the project as a result of the 2001 economic crisis.
Government policies in Bangladesh towards both river and cyclone funding have
traditionally emphasized infrastructure solutions: embankments and cyclone shelters (e.g., as in
the 1990-95 Flood Plan). Broad discussion of the flood plan among donors led some to urge a
less structural approach focused on water diversion, since embankments are a high risk, high cost
strategy in a country where rivers change course frequently, the flood plain is huge, and the
volumes of water unmatched in the world (Rogers, et al. 1989). In addition, water diversion
strategies have substantial distributional consequences, such as benefiting downstream farmers at
the expense of upstream farmers and fishermen (Boyce 1990). Their incentive effects are also
unpredictable: some studies have found that areas protected by embankments suffered greater
flood damage than other areas, potentially because of poor maintenance of embankments and the
reliance by households on the embankment rather than on private efforts to mitigate risk
(Thompson and Sultana 1996). Nevertheless, the government of Bangladesh strongly resisted
any move towards an adaptation-based strategy (Boyce 1990).
The United States exhibits similar biases. In urban areas, local governments have
significant control over flood control policies. Driever and Vaughn (1988) describe those
policies in Kansas City, Missouri and identify several persistent phenomena. First, local political
decision makers resisted limiting the development of urban floodplains, preferring even that
parks be developed elsewhere in the city and not in floodplains. Second, similar to Argentina,
these preferences were largely resistant to national legislation that required communities to
regulate flood plain use in exchange for access to federal flood insurance. Moreover, federal
enforcement of these requirements proved weak and subject to judicial challenge. Third,
structural solutions – channels to divert flood waters – were eventually undertaken in the 1980s.
The city only paid 10 percent of the cost, a subsidy that surely played a role in its preference for
floodwater diversion over floodplain management.

Competitive elections and variation in disaster mortality across countries

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The evidence is abundant that politicians in countries with vastly different characteristics
share similar incentives to refrain from pre-disaster risk reduction, to emphasize post-disaster
relief, and to allocate post-disaster relief payments in ways that maximize the political payoffs
from relief payments. None of these incentives coincides with optimal social policy. However,
even if political incentives are everywhere weak, they appear to be much weaker in some
countries than in others. This is evident in large differences across countries in the effects of
disaster. Approximately 1,200 died in Hurricane Katrina, by far the most deadly hurricane in the
United States since 1928, but 138,000 perished in the 1991 Bangladesh cyclone and more than
70,000 in 1985. An earthquake of magnitude 7.6 killed more than 17,000 in Turkey in 1999,
while one of magnitude 7.7 in densely populated Taiwan, China killed 2,300 in the same year.
Per capita income in Taiwan was three times higher than in Turkey, but deaths in Turkey were
more than 7 times greater.
Another sign of the variation across countries in the incentives of political decision
makers to reduce disaster risk is that the types of disasters that affect rich and poor countries are
distinct. The twenty most deadly disasters all struck poor countries; eleven of these were
earthquakes. In contrast, the twenty most economically costly disasters occurred in rich
countries; nearly all (eighteen) were hurricanes (Kenny 2008). It is not surprising that rich
countries experience costlier disasters. It is surprising that hurricanes are disproportionately
costly in rich countries while all kinds of disasters, particularly earthquakes, impose large costs
on poor countries. These differences do not arise because rich and poor countries confront
systematically different natural hazards. Earthquakes are not more likely to strike in poor than in
rich countries, for example. On the contrary, from 1960 to 2005, 759 potentially destructive
earthquakes struck the richer half of countries and only 502 struck the poorer.6
Instead, differing political incentives to mitigate disaster risk in rich and poor countries,
interacted with the intrinsic differences across disaster types with respect to the technical
challenges of mitigating risk, can explain these differences. Early-warning systems have a large
effect on deaths from hurricanes. Building codes can improve construction; construction quality
has a similarly large effect on deaths. Both early-warning systems and building codes are public
goods and so should vary with political incentives to supply public goods.7 These incentives
also influence private risk reduction efforts. Evacuation in the face of an impending cyclone,
flood-proofing a house or investing in earthquake-resistant construction are all sensitive to the
security of property rights, which is also a public good. Given the efficacy of public policies in
reducing mortality risks from different kinds of natural hazards, disaster mortality across all
disasters should be lower in countries where political incentives to provide public goods are
greater. However, public policy is not equally effective across in preventing economic damages
across all types of natural hazards. So, for example, while public policies can have a substantial
impact on mortality from both hurricanes and earthquakes, their impact on structural damage
from hurricanes is less than their impact on structural damage from earthquakes.

6 Potentially destructive earthquakes are those with a magnitude of at least equal to five on the Richter scale and
with more than zero population density within 15 kilometers of the epicenter.
7 Of course, such codes are public “goods” only to the extent that market forces lead to inefficient levels of building
quality.
 13

The interaction of political incentives with the type of natural hazard explains the pattern
of disaster effects across poor and rich countries. Public goods can effectively reduce mortality
from all types of disasters, so rich countries, where political decision makers have stronger
incentives to provide public goods, exhibit less disaster mortality. However, public good
provision is not uniformly effective in curbing structural damage from natural hazards: early
warning systems save lives, not structures; better construction limits earthquake damage more
than damage from hurricanes (e.g., flooding). In countries where politicians have the greatest
incentive to provide public goods, the most damaging disasters should be those least susceptible
to public policy and, in fact, hurricanes cause the greatest damage in rich countries.
Building regulations and earthquake mortality
If building codes are poorly defined and implemented, earthquake mortality should be
higher. Judging from the limited evidence available, this seems to be the case. The Doing
Business database contains two variables that should track the efficiency with which
governments implement building codes: the days it takes to complete the legal procedures
needed to build a warehouse and the number of those procedures. This information is available
to compare the mortality effects of 57 earthquakes, registering at least five on the Richter scale,
across 49 countries. Controlling for the number of procedures (as well as income per capita, the
share of construction in GDP, the share of the population in urban areas and the log of
population), the more days needed to receive permits, the larger is earthquake mortality. Data
limitations mean that this result is purely illustrative, however, since only six of the 57 instances
resulted in fatalities. For example, although the average days required to secure permits in the 51
instances in which there were no deaths was 214, lower than the 255 for the six countries in
which deaths occurred, this difference is not statistically significant.
Why would the incentives of politicians in richer countries differ systematically from
those in poorer countries? One of many possible answers to this much-debated question is
political institutions and, in particular, the presence of competitive elections. Among the
potentially destructive earthquakes that struck richer countries, 83 percent occurred in countries
that had competitive elections. Only 56 percent of the poorer countries that experienced
potentially destructive earthquakes exhibited competitive elections, however.
Competitive elections influence political incentives by reducing the costs to the general
public of expelling governments whose performance they find wanting. In principle, this should
increase the incentives of elected governments to improve public good provision and to enact
policies that improve broad social welfare. Such effects are evident in a policy domain entirely
unrelated to natural disasters, financial sector regulation. Keefer (2007) shows that the fiscal
costs of banking crises were far lower (more than 14 percent of GDP) in countries with
competitively elected governments than in countries without (at least prior to 2000). The reasons
that competitive elections might reduce the fiscal costs of banking crises also apply to natural
disasters.
Citizens cannot observe pre-crisis regulatory efforts to prevent bank crisis, just as it is
difficult for them to observe pre-disaster risk reduction policies. Governments suffer no electoral
penalty for under-investing in regulation unless economic shocks expose the fragility of bank
balance sheets that their lax regulation permitted. Similarly, governments that under-invest in
disaster risk reduction bear no penalty unless disaster actually occurs. Finally, in both cases,
when the effects of crisis on individual welfare are particularly large, citizens can more
 14

confidently attribute their welfare losses to government policy failures. The easier it is to expel
incumbent governments – e.g., through competitive elections – the lower the threshold of welfare
losses that leads to expulsion and the greater are government incentives to mitigate disaster risks.
In fact, Kahn (2005) reports evidence that democracies suffer fewer deaths from all
natural disasters than non-democracies. Moreover, since 1975, 244 large earthquakes (at least
five on the Richter scale) have been responsible for at least one death. For these earthquakes,
average deaths in countries with competitive elections were 629, compared to 3,737 in countries
lacking competitive elections. Nevertheless, though it is large, the difference in average death
rates across the two groups of countries does not strongly support the conclusion that competitive
elections, in and of themselves, significantly reduce earthquake mortality. Within each group of
countries, the variation in earthquake mortality is huge (for example, median mortality is far
lower than average mortality, at 12 and 35, respectively). This dispersion is large even relative
to the large difference in average mortality between the two groups of countries, so that this
difference is, in fact, not statistically significant.8 It is less significant still if one compares
average mortality while holding constant other country characteristics, such as population.

Other political explanations for variation in disaster mortality across countries

The fragility of the association between competitive elections and lower earthquake
mortality is not unique to disasters. In many contexts, competitive elections do not inspire
significantly greater political attention to issues affecting social welfare broadly. For example,
poor countries with and without competitive elections appear to pursue similar public policies
(Keefer 2007a). At the same time, disaster mortality varies significantly across countries
sharing similar electoral institutions. These point to other influences on the incentives of
political decision makers.
Keefer and Khemani (2005) argue that political market imperfections disrupt citizen
ability to hold government officials accountable, even in the presence of competitive elections.
One imperfection is the lack of information: if citizens are uninformed about government
actions, they cannot easily reward political actors for decisions that benefit citizens, nor punish
them for decisions that do not. Disaster policy is particularly subject to information failures.
Another imperfection is the inability of political actors to make credible commitments to
voters before they take office. These commitments could range from particular policy promises
to assurances of competence. When the commitments are not credible, citizens cannot threaten
to punish poor-performing incumbents by supporting their opponents; the opponents themselves
cannot credibly promise to govern differently or better. Credible commitment problems are
more likely with disaster policy, particularly low probability, high cost disasters, because they
limit the opportunity of political actors to build reputations about how they respond to disaster
risk. Political actors cannot easily use their reputations to bolster the credibility of their disaster
commitments.

8 A t-test used to evaluate the claim that the two averages are not equal has a p-value of .13, outside even a generous
confidence interval of 90 percent.
 15

Citizen information and disaster

The best evidence on the policy effects of citizen information comes precisely from
scholars who have looked at the impact of newspaper circulation on government responses to
crisis, particularly slow-onset crises such as drought-induced famine. These studies use access to
media, such as newspapers, to represent how well informed citizens are. Besley and Burgess
(2002) compared famine relief policies across Indian states and found that relief was much more
intensive in those states with greater media penetration. Where citizens knew that famine relief
programs existed and where they had information about government efforts to provide famine
relief, they were much more likely to receive it.
There is no evidence on the impact of media on slow-onset, low-intensity disasters
outside of India. Nevertheless, countries exhibit substantial variation in citizens‟ media access.
In 2004, newspaper circulation per 1000 population ranged from zero to more than 500; on
average, newspaper circulation was about 149 (World Development Indicators). Literacy should
also be associated with citizen information and similarly varies. In 2000, adult literacy ranged
from 19 percent to 100 percent across 113 countries. Cross-country comparisons can be made
most accurately (controlling for disaster magnitude) looking at earthquakes. Controlling for
earthquake magnitude and other factors, an increase of 100 in newspaper circulation per 1000
population is associated with about a 90 percent reduction in earthquake mortality.9
Much remains to be learned about citizen information and the disaster performance of
governments, however. Data on newspaper circulation are available only since 1997 and for
only a fraction of serious earthquakes. Because of the small sample size, the association is fragile
and disappears when one controls for income per capita. In addition, the role of information is
likely different in rapid- and slow-onset disasters and in both cases not entirely clear.
For example, in the India case, the evidence only says that famine relief is targeted to
more people with better access to newspapers; it does not tell us that losses from famine are
lower or that overall state policies towards drought and food production are better. Newspapers
may improve overall public policy towards earthquakes, reducing earthquake mortality, but it is
not clear which policies, in particular, have this effect: building codes and other ex ante risk
reduction policies, or the government emergency response after earthquakes have occurred. The
latter is more likely since it is the most likely to be reported and, from the earlier discussion of
government preferences for ex post over ex ante measures, the most politically salient.

Political credibility and disaster

Research on other policy areas, ranging from education to corruption, emphasizes the
importance of the second political market imperfection, political credibility (see, e.g., Keefer
2007b). When political actors can make credible commitments to large segments of the
population, they are more likely to support policies that benefit the whole population. For
example, their assurances that they are competent are more likely to matter, as are their
assurances to provide public goods. Successful government responses to disaster require both
competence and adequate public good provision.

9 Controlling for the log of population, population density, the urban share of the population, and earthquake
magnitude, adjusted for severity and local population density. The 90 percent reduction is with respect to the
mortality when newspaper circulation is 100 less.
 16

Unfortunately, political actors cannot easily make broadly credible commitments. These
require that they bear a reputational or other loss in case they renege on their commitments; and
that they can carry out their commitments if they take office. An important obstacle to each of
these is the difficulty of organizing political actors collectively. Countries vary widely in the
degree to which political actors are organized and this variation turns out to be significantly
associated with disaster mortality.
An important penalty for reneging on political commitments is that penalty is reputational
loss. For example, politicians able to attract votes because of a reputation for competence lose
that reputation when they govern incompetently. Politicians able to attract votes because of a
reputation for favoring particular policies similarly lose that reputation when they pursue
contrary policies. However, individual politicians rarely have reputations with most voters. At
best, they have reputations with a narrow subset of voters and can maintain that reputation by
providing just this subset with public policy benefits. They have little incentive to promise nor
to provide broad public goods, including disaster risk reduction.
Similarly, individual politicians are rarely able to approve and implement policies by
themselves. They require the cooperation of other politicians. Even if an individual candidate
has a reputation with most citizens for competence or for favoring particular policies, the
candidate can credibly promise to govern competently or to pursue particular policies only if one
of the following conditions is met. One is that other politicians have similarly broad reputations
for competence or for favoring particular policies, which is unlikely. Another is that individual
candidates can credibly promise that once in office, they will sanction incompetent or non-
cooperative politicians. Again, though, this is not straightforward: presidents and prime
ministers cannot expel recalcitrant legislators from the legislature; legislators cannot easily expel
presidents; and even autocrats are reluctant to punish non-cooperation by those personally loyal
to them.
The collective organization of political actors – for example, into disciplined political
parties with reputations for competence or particular policy preferences – addresses these
obstacles. Such an organization provides citizens a reason to support political competitors who
belong to the organization because, collectively, they can make credible promises to pursue and
implement particular policies or to govern competently that, individually, they cannot.
An organization capable of reinforcing the credibility of individual political promises has
mechanisms in place to ensure that individual members of the organization all work towards
common policy goals or share a promised level of competence. It also has mechanisms to allow
members to limit opportunistic behavior by the leaders of the organization, to prevent them from
using the organization‟s reputation for personal gain. If the organization is a political party, it
might achieve this goals through elections for leadership positions, transparent criteria for
advancement in the organization, arrangements for expelling dissident members, and rigorous
membership requirements that require significant dedication of time to promoting the
organization or evidence of adherence to key goals of the organization. Parties in government
create decision making nodes in government (key committees in the legislature, for example),
that could directly limit opportunistic behavior by others.
These are self-reinforcing characteristics: the more institutionalized is the organization
of political actors with respect to membership and internal governance, the more it can credibly
promise to achieve particular policy goals or to govern competently. However, the more
 17

attractive the organization is to citizens, the more that members have to lose if they are expelled
from the organization and the more willing they are to support the organization‟s goals. They
are more willing to make sacrifices on behalf of the organization, such as the pursuit of public
goods rather than of policies that benefit their narrow private constituencies. In addition, the
more willing they are to monitor and prevent or sanction actions by other members that reflect
badly on the organization. For example, legislators from a president‟s party pay a greater
political price for the policy failures of a president if citizens blame failure not only on the
president, but on the president‟s party. Box 3 illustrates this is the case of a heavily-criticized
response to disaster.
Box 3: Political parties and Hurricane Katrina
The aftermath of Hurricane Katrina in the United States illustrates the dynamics of
collective responsibility in the face of policy failures. Republicans controlled both houses of
Congress and the Presidency at the time. Eleven Republicans from the House of Representatives
issued a report (US Congress 2006) on the government response to the hurricane. Democrats did
not formally participate, expecting that the report would be a whitewash. Instead, it was widely
regarded as a “blistering” attack on the administration (The Washington Post, February 12, 2006,
p. 1).
Why would Republican Congressmen have issued a report critical of the Republican
President‟s response to the disaster? One reason was to identify the reasons for tragic failures in
the response to the disaster. Another potential effect of the report, however, and the reason why
Republicans would have been particularly interested in producing the report, was to try to limit
the damage to the Republican Party‟s reputation caused by the administration‟s Hurricane
response. By focusing on failures of administration officials, the report implicitly makes the case
that no one outside the administration (e.g., Congressional Republicans) could have prevented
the failures that occurred. This effort had limited success. Based on polls it had undertaken,
Time magazine reported that voters were turning against Republican candidates for reasons that
included the government response to Katrina (Karen Tumulty (2006). “Republicans on the Run.”
Time Sunday, March 26, online edition:
http://www.time.com/time/magazine/article/0,9171,1176997,00.html). Nevertheless, in other
countries, where party failures have less of an impact on the political futures of individual
candidates, legislators from the president‟s party would have been more likely not to issue any
report at all.
The organization of political actors into institutionalized groups is difficult, however, and
relatively rare. Politicians with a large personal following have little incentive to subordinate
themselves to the rules of an institutionalized organization of politicians. On the contrary,
joining such a group may require that they pursue policy goals that jeopardize their reputations
with their personal supporters. At the same time, such candidates are enormously attractive to
party leaders who are eager to maximize their votes in current elections. They may prefer to
recruit these personally popular candidates, even though they undermine the longer-range goal of
creating an institutionalized political party. As a consequence, for fear of discouraging
individual candidates with large personal followings, party leaders are reluctant to take all of the
actions that are associated with developing a credible programmatic stance on issues, such as
requiring evidence of significant individual effort in pursuit of these issues prior to joining the
party. Parties that create large hurdles to membership or candidacy improve their reputations
 18

with voters, but hurt their ability to recruit candidates with large personal followings (see, e.g.,
Snyder and Ting 2002).
In sum, then, we expect that in countries with competitive elections, the provision of
public goods is lower when political actors are not organized into institutionalized political
parties, parties capable of obliging members to pursue common objectives. When such countries
experience disaster, disaster mortality should be higher. In fact, it is.
Two variables are plausibly related to the degree of institutionalized organization of
politicians. One is the number of years that countries have had continuous competitive elections.
On the one hand, it is more difficult to substitute competitive elections for autocratic rule when
political parties are institutionalized: they deliver better services to citizens, improving citizen
willingness to defend competitive elections, and institutionalized parties are better able to defend
a regime than are unorganized political actors. Competitive elections in countries with
institutionalized political parties should therefore be more enduring. On the other hand, the
formation of institutionalized political parties may not happen quickly. The longer competitive
elections have been held, the greater the chances that institutionalized parties are in place.
The second variable that captures the institutionalization of political parties is their age.
The logic is similar. Parties are unlikely to survive when it is trivial for individual members to
leave and set up their own parties (i.e., when the parties are not institutionalized and have no
characteristics that are attractive to voters). At the same time, party institutionalization can take
time, making it more likely that older parties are more institutionalized than younger parties.
Figure 2 summarizes results in Keefer, Neumayer and Plümper (2009) and illustrates the
significant relationship between the years of competitive elections, the average age of political
parties in a country, and earthquake mortality, controlling for the magnitude of the earthquake,
income per capita, total population and the percent of the population in urban areas. In addition,
to avoid conflating the effects of political parties with those of long-lived rulers, the estimates in
Figure 2 control for the years in office of the ruler. The estimates look only at countries that
have competitive elections and suggest that every additional year that competitive elections are
continuously held is associated with more than a six percent drop in earthquake mortality
compared to one less year of competitive elections; one additional year of average party age is
associated with approximately two percent less disaster mortality compared to one less year of
average party age.
The importance of credible commitment in disaster risk reduction, and the contribution to
credibility made by collectively organized politicians, are not unique to settings with competitive
elections. In some countries without competitive elections, leaders remain in power by securing
the support of a narrow slice of the population. We do not expect these types of leaders to
provide broad public goods. Other leaders, though, pursue a different strategy and seek to
maintain their political position by building broader popular support, for example through
economic growth and the pursuit of more public-interested policies. However, to implement
these types of policy goals, unelected leaders also require institutionalized political
organizations.
First, to attract private investment, such leaders must provide assurances that the
investments will not be expropriated. This requires that investors have some guarantee against
expropriation. Second, to be sure that public policies are implemented as intended, leaders
require well-performing public sectors. In particular, they require public officials who are
 19

willing and able to respond to leader promises to reward them if public policies are well-
provided. However, these promises do not motivate bureaucrats if they are not credible.

Figure 2: Percentage drop in earthquake fatalities with every

additional year of competitive elections or average party age
(in countries with competitive elections)
0%

-1%

-2%

-3%

-4%

-5%

-6%

-7%

Additional year of competitive elections Additional year of average party age

Note: Estimates from regressions of earthquake mortality on years of continuous competitive elections or average
party age, controlling for earthquake magnitude, the log of population, population density, the share of people
residing in urban areas and the years in office of the leader. The sample comprises only country-years with
competitive elections. Competitive elections are those in which multiple candidates or parties are allowed to run for
office, do compete, and where none gets more than 75 percent of the vote. Political variables from the Database of
Political Institutions (Beck, et al.).
One way for leaders to make credible promises to investors and civil servants is through
institutionalized ruling parties (Gehlbach and Keefer 2008). In an institutionalized ruling party,
party members have greater scope to exchange information and to coordinate their activities.
The ability to coordinate gives them the possibility of punishing leaders who renege on promises
made to them or that threaten all of their interests by undermining the hold that the ruling party
has on the country. Gehlbach and Keefer (2008) conclude that some autocrats will decide to
allow large ruling parties, distinguished by the ability of ruling party members to coordinate
among themselves and, therefore, confronting lower costs of overthrowing the autocrat, but also
greater incentives to invest without fear of autocrat expropriation.
This same coordination also increases leader incentives to provide public goods, such as
disaster preparedness. First, the entire party loses if disaster undermines the perceived
competence of the government; and second, as the size of the party grows (the Chinese
Communist Party has approximately 60 million members, for example), party members
themselves are better off spending resources on public goods rather than on private transfers to
them.
Recent disaster episodes illustrate the importance of institutionalized ruling parties with
large memberships in countries with no competitive elections. China, with a large and
 20

institutionalized ruling party, launched a rapid, massive relief effort in response to the 2008
earthquake. In addition, it significantly tightened school building standards into the future
(Washington Post 12/28/2008). Party institutionalization was critical to efficient mobilization of
the rescue effort, and also spurred changes to building standards, as a way to protect the party‟s
reputation and to insure against future performance failures. On the other hand, to ensure the
predominance of the ruling party and its internal cohesion, another part of the policy response
was to discourage the efforts of parents to organize in protest against construction failures and to
hold individual officials responsible for building collapse (Washington Post 1/14/2009).
In contrast to China, the government of Myanmar made, at best, dilatory efforts to
ameliorate the effects of Cyclone Nargis in 2008, a storm that killed 78,000. Myanmar is not
governed through an institutionalized ruling party, however, in part because the availability of
natural resource rents render this style of government less attractive to Myanmar‟s leaders
(Gehlbach and Keefer 2008).

Figure 3: Percentage drop in earthquake fatalities with

every additional year of ruling party age
(in countries without competitive elections)

0%
-1%

-2%
-3%
-4%
-5%

-6%

-7%
-8%
-9%
-10%

Additional year of ruling party age

Note: Estimates from regressions of earthquake mortality on age of ruling party, controlling for earthquake
magnitude, the log of population, population density, the share of people residing in urban areas and the years in
office of the leader. The sample comprises only country-years where governments were not competitively elected.
Competitive elections are those in which multiple candidates or parties are allowed to run for office, do compete,
and where none gets more than 75 percent of the vote. Political variables from the Database of Political Institutions
(Beck, et al.).
Party age in countries that lack competitive elections, taking into account the years that
the leader has been in office, is again a plausible proxy for the institutionalization of political
parties. Institutionalized ruling parties are more likely to exhibit changes in leadership without
changes in party name; they are generally more likely to endure than non-institutionalized ruling
parties that exist only as a vehicle to support a single leader. Figure 3, again summarizing results
in Keefer, Neumayer and Pluemper (2009) provide evidence, analogous to that in Figure 2, that
 21

political party institutionalization is associated with a significant negative effect on earthquake

mortality, controlling for the same factors as in Figure 2. The effect of an additional year of
ruling party age is larger than the party age effect in countries with competitive elections: an
additional year in ruling party age corresponds to more than nine percent less earthquake
mortality.

Disaster relief and moral hazard

The discussion so far has focused on internal determinants of government efforts to
reduce disaster risk. Disaster, however, triggers often large external responses. The prospect of
these responses can influence disaster risk reduction efforts. For example, households, expecting
assistance from the government, may reduce efforts to flood proof their homes, or may be
insufficiently vigilant about disaster vulnerability in the areas where they build those homes.
Sub-national jurisdictions may shirk on their mitigation efforts in the expectation of post-disaster
assistance from the national government. National governments, expecting international
assistance in the event of a disaster, may do the same.
Though data are not available to look specifically at disaster-related foreign assistance,
foreign aid itself does affect recipient governments attitudes towards disaster risk reduction. Aid
has two potential and offsetting effects. One is to loosen budget constraints that prevent
countries from investing in ex ante disaster risk reduction. These investments should lower
disaster mortality. However, past aid is a signal to countries of the amount of aid that they can
receive in the event of a disaster; to the extent that this is true, and countries substitute post-
disaster relief for pre-disaster risk reduction, more aid should lead to greater disaster mortality.
Raschky and Schwindt (2008) investigate the effect of foreign aid on mortality from
storms, floods and earthquakes. Though their results support the argument that both effects
matter, they conclude that the latter effect dominates: foreign aid is associated with higher
disaster mortality, particularly deaths from storms. The net effect of aid on deaths from floods
and earthquakes is ambiguously, however. Foreign aid is associated with a lower likelihood that
countries will experience any deaths from floods and earthquakes but, if any deaths occur,
foreign aid is associated with higher mortality. The two effects cancel out so that the net effect
of foreign aid on flood and earthquake death is negligible.
Various facts about mortality prevention might help to explain these results. For
example, foreign aid may encourage the construction of earthquake-proof buildings. However,
to the extent that governments fail to supervise the quality of building-reinforcement, badly
reinforced buildings proliferate. Though they are less likely to collapse in an earthquake, they
are likely to kill more inhabitants if they do collapse. Foreign aid may go to the construction of
flood embankments, which again reduce the chances of death from high precipitation but, if the
embankments are breached, increase deaths.

Conclusion
Disaster risk reduction is unpopular with politicians everywhere: its benefits are hard for
citizens to perceive and, in any case, are potentially far in the future. Politicians therefore tend to
prefer disaster policies that offer tangible benefits to concentrated groups of individuals:
structural solutions that divert water around flood plains or disaster relief programs. However,
the most striking fact about disaster is the very large variation across countries in the damage that
disasters cause. One explanation for this is that disaster risk reduction usually takes the form of
 22

public goods. Political incentives to provide public goods vary significantly across countries.
The difference can be explained not only, or even especially, by whether political decision
makers are chosen in competitive elections, but by the degree to which citizens are informed
about decision maker actions and the ability of decision makers to make credible commitments
to most citizens.
A key component of political credibility is the nature of political parties that
simultaneously allow citizens to hold collective groups of political actors accountable for success
or failure, and that also allow individual political actors to make credible promises to pursue
public policies in the broad public interest. Across both non-democracies and democracies, the
existence of such “institutionalized” political parties is significantly associated with reductions in
earthquake mortality. Younger democracies, less likely to have political actors who can make
broadly credible promises to citizens, also suffer greater mortality in the event of earthquakes,
holding constant earthquake magnitude and other factors.
By taking these biases into account, foreign assistance can compensate for them. The
record suggests, however, that this has not been past practice, given Raschky and Schwindt‟s
(2008) findings that external assistance can increase disaster mortality. One issue is the
justifiable importance to donors of increasing local ownership of development projects.
Unfortunately, local preferences in the case of disaster risk reduction are for sub-optimal
policies: less risk reduction than is efficient, and for less efficient solutions to reduce risk, such
as structural rather than regulatory solutions. A second, related issue is that foreign involvement
in risk reduction tends to be highest immediately following disasters, precisely when local
governments are most interested. However, in this period foreign assistance is frequently
dedicated to relief.
A key characteristic of more successful foreign assistance should therefore be to more
explicitly advocate for disaster risk reduction prior to disaster, and for risk reduction strategies
that are more regulatory in nature (e.g., managing flood plain development and encouraging
private risk mitigation measures) than structural. These are not easy proposals to implement, in
part because countries that govern donor policies themselves react to natural hazards, at home
and abroad, with many of the same biases that afflict disaster risk reduction in poor countries.
However, the fact that those biases are potentially greater and have larger mortality
consequences in recipient countries should be sufficient to support a shift in perspective.
 23

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