The Political Economy of Natural Disaster Insurance: Lessons from the Failure of a Proposed Compulsory Insurance Scheme in Germany
AbstractThis paper studies the politico-economic reasons for the refusal of a proposed compulsory flood insurance scheme in Germany. It provides the rationale for such scheme and outlines the basic features of a market-orientated design. The main reasons for the political down-turn of this proposal were the misperceived costs of a state guarantee, legal objections against a compulsory insurance, distributional conflicts between the federal government and the Ger-man states (Länder) on the implied administrative costs, and the well-known charity hazard of ad-hoc disaster relief. The focus on pure market solutions proved to be an ineffective strategy for policy advice in this field.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 620.
Length: 19 p.
Date of creation: 2006
Date of revision:
Other versions of this item:
- Schwarze, Reimund & Wagner, Gert G., 2006. "The political economy of natural disaster insurance: Lessons from the failure of a proposed compulsory insurance scheme in Germany," Discussion Papers 2006/10, Technische Universität Berlin, School of Economics and Management.
- NEP-ALL-2006-09-16 (All new papers)
- NEP-ENE-2006-09-16 (Energy Economics)
- NEP-ENV-2006-09-16 (Environmental Economics)
- NEP-IAS-2006-09-16 (Insurance Economics)
- NEP-POL-2006-09-16 (Positive Political Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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The Geneva Papers on Risk and Insurance - Issues and Practice,
Palgrave Macmillan, vol. 29(2), pages 154-168, April.
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- Reimund Schwarze & Gert G. Wagner, 2009. "Natural Hazards Insurance in Europe ? Tailored Responses to Climate Change Needed," Working Papers 2009-06, Faculty of Economics and Statistics, University of Innsbruck.
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- E. Keskitalo & Gregor Vulturius & Peter Scholten, 2014. "Adaptation to climate change in the insurance sector: examples from the UK, Germany and the Netherlands," Natural Hazards, International Society for the Prevention and Mitigation of Natural Hazards, vol. 71(1), pages 315-334, March.
- repec:idb:brikps:11118 is not listed on IDEAS
- Christian Kuhlicke & Anna Scolobig & Sue Tapsell & Annett Steinführer & Bruna Marchi, 2011. "Contextualizing social vulnerability: findings from case studies across Europe," Natural Hazards, International Society for the Prevention and Mitigation of Natural Hazards, vol. 58(2), pages 789-810, August.
- Céline Grislain-Letremy, 2013. "Natural Disters : Exposure and Underinsurance," Working Papers 2013-15, Centre de Recherche en Economie et Statistique.
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