The Role of Macro-Economic Model for Disaster Risk Reduction Pol-icy in Developing Countries

HIROYUKI WADA, Katsumi Wakigawa, Muneta Yokomatsu, Kimio Takeya


It has been noted that in recent years disaster risk reduction investment, in particular such invest-ment prior to a disaster, is important in dealing with increasingly large-scale natural disasters that have serious socio-economic impacts. Especially, developing countries are in a vulnerable position vis-à-vis disasters, as the scale of economies in these countries is small and they do not foster a cul-ture of reducing disaster risks. As a result, disasters directly harm their economic underpinnings, in-hibiting their economic growth and sending them back into the poverty trap. Disaster risk reduction investment prior to a disastrous event is an extremely effective measure of preventing or ameliorat-ing such conditions. However, no definitive method, as a decision making tool, for evaluating the quantitative effects of disaster risk reduction investment has been established. Given this situation, we develop a model in this study that allows the quantitative evaluation of disaster risk reduction investment focused on developing countries. Moreover, we use data from Pakistan to confirm the efficacy of the model, as well as to confirm that disaster risk reduction investment contributes to economic growth and the alleviation of poverty in developing countries.


Natural disaster risk reduction;Development economics;Gini coefficient;DCGE model

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