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In the Aftermath of Large Natural Disasters, what happens to foreign aid?

  • Oscar Becerra

    (Inter-American Development Bank)

  • Eduardo Cavallo

    (Inter-American Development Bank)

  • Ilan Noy

    ()

    (University of Hawaii at Manoa, Department of Economics)

We examine Official Development Assistance (ODA) in the aftermath of large natural disasters in developing countries between 1970 and 2008. We find that while ODA increases significantly compared to pre-disaster flows, the typical surges are small in relation to the size of the affected economies or the estimated economic damages. Moreover, we find that the size of the surges is related to the catastrophic nature of the event itself and the lack of other resources available to the affected countries. However, we do not find robust evidence that political affinity between donors and affected countries, and common geo-strategic interests, matter for the allocation of post disaster aid.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_10-18.pdf
File Function: First version, 2010
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Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 201018.

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Length: 31 pages
Date of creation: 15 Sep 2010
Date of revision:
Handle: RePEc:hai:wpaper:201018
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  1. Antonio David, 2010. "How Do International Financial Flows to Developing Countries Respond to Natural Disasters?," IMF Working Papers 10/166, International Monetary Fund.
  2. Raschky, Paul A. & Schwindt, Manijeh, 2009. "On the channel and type of international disaster aid," Policy Research Working Paper Series 4953, The World Bank.
  3. Eduardo Cavallo & Andrew Powell & Oscar Becerra, 2010. "Estimating the Direct Economic Damage of the Earthquake in Haiti," Research Department Publications 4652, Inter-American Development Bank, Research Department.
  4. Matteo Bobba & Andrew Powell, 2006. "Multilateral Intermediation of Foreign Aid: What is the Trade-Off for Donor Countries?," IDB Publications (Working Papers) 6728, Inter-American Development Bank.
  5. Ilan Noy, 2007. "The Macroeconomic Consequences of Disasters," Working Papers 200707, University of Hawaii at Manoa, Department of Economics.
  6. Chong, Alberto & Gradstein, Mark, 2008. "What determines foreign aid? The donors' perspective," Journal of Development Economics, Elsevier, vol. 87(1), pages 1-13, August.
  7. Buffie, Edward F. & O'Connell, Stephen A. & Adam, Christopher, 2010. "Fiscal inertia, donor credibility, and the monetary management of aid surges," Journal of Development Economics, Elsevier, vol. 93(2), pages 287-298, November.
  8. Emmanuel Frot & Javier Santiso, 2009. "Herding in Aid Allocation," OECD Development Centre Working Papers 279, OECD Publishing.
  9. St├ęphane Hallegatte & Valentin Przyluski, 2010. "The Economics of Natural Disasters," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 11(2), pages 14-24, 07.
  10. Matteo Bobba & Andrew Powell, 2007. "Aid and Growth: Politics Matters," Research Department Publications 4511, Inter-American Development Bank, Research Department.
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