The Political Economy of Natural Disaster Insurance: Lessons from the Failure of a Proposed Compulsory Insurance Scheme in Germany
This 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.
|Date of creation:||2006|
|Contact details of provider:|| Postal: Mohrenstraße 58, D-10117 Berlin|
Web page: http://www.diw.de/en
More information through EDIRC
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.:
- Sinn, Hans-Werner, 1995.
" A Theory of the Welfare State,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 97(4), pages 495-526, December.
- Hans-Werner Sinn, 1994. "A Theory of the Welfare State," NBER Working Papers 4856, National Bureau of Economic Research, Inc.
- Sinn, Hans-Werner, 1995. "A Theory of the Welfare State," CEPR Discussion Papers 1278, C.E.P.R. Discussion Papers.
- 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.
- 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;The Geneva Association, vol. 29(2), pages 154-168, April.
- 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. Full references (including those not matched with items on IDEAS)