Death tolls from natural disasters: Influence of interactions between fiscal decentralization, institution, and economic development

Yamamura, Eiji (2012): Death tolls from natural disasters: Influence of interactions between fiscal decentralization, institution, and economic development.

Abstract

Previous research shows that the effect of decentralization on damage caused by natural disasters will differ according a country’s level of economic development. To investigate this matter further, this paper uses cross-country data from 1990 to 2001 to examine how decentralization, institution, and economic development influence the number of deaths caused by natural disasters. The major findings are that decentralization reduces deaths and its effect is strengthened in countries with lower levels of public sector corruption and better functioning legal systems. Furthermore, the interaction between decentralization and high quality institutions has a greater contribution to the reduction of deaths in more developed countries.

• Item Type: MPRA Paper
• Language: English
• Keywords: Natural disaster, law and order, corruption, economic development
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General; K - Law and Economics > K1 - Basic Areas of Law > K10 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming

References

Anbarci, N., Escaleras, M., Register, C. 2005. Earthquake fatalities: the interaction of nature and political economy. Journal of Public Economics 89, 1907–1933.

Albala-Bertrand, J. (1993), Political Economy of Large Natural Disasters, Oxford　University Press, Inc., New York.

Congleton, R.G. (2006). The story of Katrina: New Orleans and the political economy of catastrophe. Public Choice 127, 5-30.

Easterly, W., Levine, R. (1997). Africa's growth tragedy: Policies and ethnic divisions.Quarterly Journal of Economics 112: 1203-50.

Escaleras, M.,Anbarci, N., Register,C. (2007). Public sector corruption and major earthquakes: A potentially deadly interaction. Public Choice 132(1): 209-230.

Escaleras, M., Register, C. (2010). Fiscal decentralization and natural disaster　risks. forthcoming in Public Choice.

Fisman, R., Gatti, R. (2002 a). Decentralization and corruption: evidence across countries. Journal of Public Economics 83: 325-345.

Fisman, R., Gatti, R. (2002 b). Decentralization and corruption: Evidence from U.S. federal transfer programs. Public Choice 113: 25-35.

Greif, A. (1994.) Cultural belief and the organization of society: a historical and theoretical reflection on collectivist and individualist societies, Journal of Political Economy 102, 912-950.

Hayami, Y. (2001). Development Economics: From the Poverty to the Wealth of Nations. Oxford University Press, New York.

Horwich, G. (2000). Economic lessons from the Kobe earthquake, Economic Development and Cultural Change 48: 521-542.

Kahn, M. (2005). The death toll from natural disasters: The role of income, geography and institutions. Review of Economics and Statistics 87(2), 271-284.

Kellenberg, D., Mobarak, A. (2008). Does rising income increase or decrease damage risk from natural disasters? Journal of Urban Economics 63: 788-802.

La Porta, R., Lopez de Silanes, F., Shleifer, A., Vishni, R. (1999). Quality of government. Journal of Law, Economics and Organization 15(1), 222–279.

Mauro, P. (1995). Corruption and Growth. Quarterly Journal of Economics 110, 681– 712.

Mill, J. 1977. De Tocqueville on democracy in America. In J. Robson (eds), Collected works. University of Toronto Press, Toronto.

North. D., 1990. Institutions, Institutional Change and Economic Performance. Cambridge University Press, Cambridge.

Panizzi, U. (1999). On the determinants of fiscal centralization: theory and evidence. Journal of Public Economics 74, 97-139.

Salvatore, B. 2008. Standardized income inequality data for use in cross-national research. Sociological Inquiry 77, 3–22.

Sawada, Y. (2007). The impact of natural and manmade disasters on household welfare. Agricultural Economics 37, 59–73.

Sawada, Y., Shimizutani, S. (2007). Consumption insurance against natural disasters: evidence from the Great Hanshin-Awaji (Kobe) earthquake. Applied Economics Letters 14(4–6), 303–306.

Sawada, Y., Shimizutani, S. (2008). How do people cope with natural disasters? Evidence from the great Hanshin-Awaji (Kobe) earthquake in 1995. Journal of Money, Credit and Banking 40(2–3), 463–488.

Skidmore, M., Toya,H. (2002). Do natural disasters promote long-run growth?, Economic Inquiry 40(4):664-687.

Shughart II., W.F. (2006). Katrinanomics: The politics and economics of disaster relief. Public Choice 127, 31-53.

Skidmore, M., Toya, H. (2002). Do natural disasters promote long-run growth? Economic Inquiry 40(4), 664–687.

Sobel. R.S., Leeson, P.T. (2006).Government’s response to Hurricane Katrina: A public choice analysis. Public Choice 127, 55-73.

Strobl, E. (2011 a). The economic growth impact of hurricanes: Evidence from U.S. coastal countries. Review of Economics and Statistics 93(2), 575–589.

Strobl, E. (2011 b). The economic growth impact of natural disasters in developing countries: Evidence from hurricane strikes in the Central American and Caribbean regions. Journal of Development Economics, 97, 130–141.

Swaleheen, M. (2011). Economic growth with endogenous corruption: an empirical study. Public Choice 146(1), 23–41.

Tanzi, V., (1995). Fiscal federalism and decentralization: a review of some efficiency and macroeconomic aspects. in World Bank, annual World Bank conference on development economics 1995. Washington, C., The world Ban.

Tanzi, V., (2002). Corruption around the world: causes, consequences, scope, and cures, in Abed, G.T., Gupta, S (Eds.), Governance, Corruption, & Economic Performance. International Monetary Fund., Washington, D.C., 19-58.

Tanzi, V., Davoodi, H. (1997). Corruption, public investment, and growth. IMF working paper WP/97/139.

Tanzi, V., Davoodi, H. (2002).Corruption, growth, and public finance, in Abed, G.T., Gupta, S (Eds.), Governance, Corruption, & Economic Performance. International Monetary Fund., Washington, D.C., 197-222.

Tol, R., Leek, F. (1999). Economic analysis of natural disasters. in T. Downing, A. Olsthoorn, and R. Tol, eds, Climate Change and Risk, Routledge, London.

Toya, H., Skidmore, M. (2007). Economic development and the impacts of natural disasters. Economics Letters 94(1): 20-25. Toya, H., Skidmore, M. (2010). Natural disaster impacts and fiscal decentralization. CESifo Forum 11(2): 43-55. Treisman, D. (2002). The causes of corruption: a cross-national study. Journal of Public Economics 76, 399-457.

Wooldridge, J. (2002). Econometric analysis of cross section and panel data. Cambridge, MA: MIT Press.

World Bank. (2011). World Development Indicators 2011 on CD-ROM. The world Bank.

Yamamura, E. (2010). Effects of interactions among social capital, income and learning from experiences of natural disasters : A case study from Japan. Regional Studies　44 (8): 1019-1032.