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Aid, Catastrophes and the Samaritan's Dilemma
Author(s) -
Raschky Paul A.,
Schwindt Manijeh
Publication year - 2016
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/ecca.12194
Subject(s) - natural disaster , incentive , toll , dilemma , preparedness , developing country , development economics , economics , politics , crowding , political science , business , economic growth , geography , psychology , market economy , law , philosophy , epistemology , neuroscience , biology , meteorology , genetics
This paper analyses the impact of past foreign aid on the recipient country's preparedness against natural disasters. We estimate the impact of past foreign aid on the occurrence of natural disasters and the death toll from disasters using data from 5089 major natural disasters in 81 developing countries between 1979 and 2012. The results suggest that past foreign aid flows crowd out the recipient's incentives to provide protective measures that decrease the likelihood and the societal impact of a disaster. The crowding‐out effect appears to be stronger in developing countries that are relatively poorer and have weaker political institutions.