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:
Publication status: Published in: European Environment 17 (2007), 6, 403-415
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.:
- Reimund Schwarze & Gert G Wagner, 2004.
"In the Aftermath of Dresden: New Directions in German Flood Insurance,"
The Geneva Papers on Risk and Insurance - Issues and Practice,
Palgrave Macmillan, vol. 29(2), pages 154-168, April.
- Reimund Schwarze & Gert G. Wagner, 2004. "In the Aftermath of Dresden: New Directions in German Flood Insurance," The Geneva Papers on Risk and Insurance, The International Association for the Study of Insurance Economics, vol. 29(2), pages 154-168, 04.
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"A Theory of the Welfare State,"
CEPR Discussion Papers
1278, C.E.P.R. Discussion Papers.
- Reimund Schwarze & Gert G. Wagner, 2002. "Hochwasserkatastrophe in Deutschland: über Soforthilfen hinausdenken," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 69(35), pages 596-600.
- Reimund Schwarze & Gert G. Wagner, 2003. "Marktkonforme Versicherungspflicht für Naturkatastrophen: Bausteine einer Elementarschadenversicherung," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 70(12), pages 183-189.
- Beck, Silke & Kuhlicke, Christian & Görg, Christoph, 2009. "Climate policy integration, coherence, and governance in Germany. PEER Climate Change Initiative - Project 2: "Climate policy integration, coherence, and governance"," UFZ Reports 01/2009, Helmholtz Centre for Environmental Research (UFZ).
- C. Grislain-Letrémy, 2013. "Natural Disasters: Exposure and Underinsurance," Documents de Travail de la DESE - Working Papers of the DESE g2013-12, Institut National de la Statistique et des Etudes Economiques, DESE.
- Juan José Durante & Kurt S. Focke & Guillermo J. Collich & Mario Marcel & Torben Andersen, 2010. "Natural Disasters Financial Risk Management : Technical and Policy Underpinnings for the Use of Disaster-Linked Financial Instruments in Latin America and the Caribbean," IDB Publications 11118, Inter-American Development Bank.
- 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.
- Céline Grislain-Letremy, 2013. "Natural Disters : Exposure and Underinsurance," Working Papers 2013-15, Centre de Recherche en Economie et Statistique.
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