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Foreign Aid in the Aftermath of Large Natural Disasters
Author(s) -
Becerra Oscar,
Cavallo Eduardo,
Noy Ilan
Publication year - 2014
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12095
Subject(s) - natural disaster , damages , stock (firearms) , economics , surge , event study , event (particle physics) , politics , development economics , economy , geography , political science , law , meteorology , context (archaeology) , physics , archaeology , quantum mechanics
This paper examines O fficial D evelopment A ssistance ( ODA ) in the aftermath of large natural disasters between 1970 and 2008. Using an event‐study approach, the paper finds that while the median increase in ODA is 18% compared with pre‐disaster flows, the typical surge is small in relation to the size of the affected economies. Moreover, aid surges typically cover only 3% of the total estimated economic damages caused by the disasters. The main determinants of post‐disaster aid surges are found to be the intensity of the event itself and the recipient country's characteristics such as the level of development, country size and the stock of foreign reserves. The paper does not find evidence that political considerations or strategic behavior on the part of donors determine the size of post‐disaster aid surges.