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Aid, natural disasters and the samaritan's dilemma

  • Raschky, Paul A.
  • Schwindt, Manijeh

This paper discusses the impact of foreign aid on the recipient country's preparedness against natural disasters. The theoretical model shows that foreign aid can have two opposing effects on a country's level of mitigating activities. In order to test the theoretical propositions, the authors analyze the effect of foreign aid dependence on ex-ante risk-management activity proxied by the death toll from major storms, floods and earthquakes occurring worldwide between 1980 and 2002. They find evidence that the crowding-out effect of foreign aid outweighs the preventive effect in the case of storms, while there is mixed evidence in the case of floods and earthquakes.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4952.

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Date of creation: 01 Jun 2009
Date of revision:
Handle: RePEc:wbk:wbrwps:4952
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