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Foreign Aid in the Aftermath of Large Natural Disasters

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  • Oscar Becerra
  • Eduardo Cavallo
  • Ilan Noy

Abstract

This paper examines Official Development Assistance (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.

Suggested Citation

  • Oscar Becerra & Eduardo Cavallo & Ilan Noy, 2014. "Foreign Aid in the Aftermath of Large Natural Disasters," Review of Development Economics, Wiley Blackwell, vol. 18(3), pages 445-460, August.
    • Handle: RePEc:bla:rdevec:v:18:y:2014:i:3:p:445-460
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    File URL: http://hdl.handle.net/10.1111/rode.12095
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    More about this item

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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