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Financial protection of the state against natural disasters : a primer


  • Ghesquiere,Francis
  • Mahul,Olivier


This paper has been prepared for policy makers interested in establishing or strengthening financial strategies to increase the financial response capacity of governments of developing countries in the aftermath of natural disasters, while protecting their long-term fiscal balances. It analyzes various aspects of emergency financing, including the types of instruments available, their relative costs and disbursement speeds, and how these can be combined to provide cost-effective financing for the different phases that follow a disaster. The paper explains why governments are usually better served by retaining most of their natural disaster risk while using risk transfer mechanisms to manage the excess volatility of their budgets or access immediate liquidity after a disaster. Finally, it discusses innovative approaches to disaster risk financing and provides examples of strategies that developing countries have implemented in recent years.

Suggested Citation

  • Ghesquiere,Francis & Mahul,Olivier, 2010. "Financial protection of the state against natural disasters : a primer," Policy Research Working Paper Series 5429, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5429

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    References listed on IDEAS

    1. Gurenko, Eugene & Lester, Rodney, 2004. "Rapid onset natural disasters : The role of financing in effective risk management," Policy Research Working Paper Series 3278, The World Bank.
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    Cited by:

    1. World Bank, 2013. "Building Resilience : Integrating Climate and Disaster Risk into Development
      [Crear resiliencia mediante la integración de los riesgos climáticos y de desastre en el proceso de desarrollo - Resumen
      ," World Bank Other Operational Studies 16639, The World Bank.
    2. repec:wbk:wboper:16761 is not listed on IDEAS
    3. World Bank, 2013. "Financing Post-Disaster Recovery and Reconstruction Operations," World Bank Other Operational Studies 22418, The World Bank.
    4. World Bank Group, 2016. "Colombia," World Bank Other Operational Studies 25288, The World Bank.

    More about this item


    Insurance&Risk Mitigation; Banks&Banking Reform; Debt Markets; Natural Disasters; Hazard Risk Management;

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