Fiscal shortage risk and the potential role for tropical storm insurance: evidence from the Caribbean

Ouattara, Bazoumana; Strobl, Eric; Vermeiren, Jan; Yearwood, Stacia

doi:10.1017/s1355770x18000244

Cited by 6 publications

(7 citation statements)

References 23 publications

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“…This result can be seen in Table 6, panel 2 (affected people variable), which shows that disasters significantly increase capital expenditure at the district level in the year following a disaster. These results stray from those of Ouattara et al (2018), who found that disasters do not significantly affect capital expenditure in the Caribbean. Other resources, such as international aid, are likely a reason for the differences between our study and their study.…”

Section: Estimation Resultscontrasting

confidence: 92%

“…All fiscal data were provided by the Directorate-General for Financial Balance at the Indonesian Ministry of Finance (MoF). In line with Ouattara et al (2018), we converted all values into natural logged form. Local own-source revenue includes local taxes, levies, and other authorized sources such as profits from the selling of local assets, goods, and services; interest income from savings; currency exchange profits; and compensation.…”

Section: Datamentioning

confidence: 99%

“…First, this study used disaggregated data at the district and provincial levels. Similar studies have largely been conducted at the national level (Lis and Nickel 2010;Noy and Nualsri 2011;Lee et al 2018;Ouattara et al 2018;Benali et al 2019). Such studies generally consider total expenditure without distinguishing between each type of expenditure.…”

Section: Introductionmentioning

confidence: 99%

“…The effect of disasters on government revenue can be examined in both the short and long terms. Using the vector auto-regressive panel method, Ouattara et al (2018) found that tropical storms in the Caribbean resulted in decreased government revenues over the year in which the disaster occurred. A USD 1 increase in damage caused by disasters led to a reduction of USD 8 in government revenue.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Are Disasters a Risk to Regional Fiscal Balance? Evidence from Indonesia

Wiyanti

Halimatussadiah

2021

Int J Disaster Risk Sci

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Indonesia is an archipelago country and is fairly vulnerable to disasters. While disasters generally affect government revenue and expenditure, their effects likely vary by country. This study examines the effect of disasters on the fiscal balance, revenue, and expenditure of local governments. We used panel data and fixed effects methods to estimate the degree to which disaster severity influences budgetary solvency at the district and provincial levels in Indonesia between 2010 and 2018. This study revealed that disasters can strain fiscal balance at the district and provincial levels due to a decrease in own-source revenue and an increase in social assistance expenditure, capital expenditure, consumption expenditure, and unexpected expenditure. The district expenditure most threatened by disasters is consumption expenditure, while the provincial expenditure most threatened is unexpected expenditure. We also found that an increase in capital expenditure can lead to financial burden due to delays of planned projects or post-disaster reconstruction. Based on these findings, it is clear that some forms of insurance or other financing schemes are necessary to mitigate the adverse impacts of disasters on regional fiscal balance.

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Section: Estimation Resultscontrasting

confidence: 92%

Section: Datamentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Are Disasters a Risk to Regional Fiscal Balance? Evidence from Indonesia

Wiyanti

Halimatussadiah

2021

Int J Disaster Risk Sci

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“…Mejia (2014) investigated natural disasters (hurricane and floods) and their impact on per capita GDP and the debt to GDP ratio in 12 Caribbean countries. Ouattara et al (2018) measured the impact of hurricanes on government spending in a set of Caribbean countries. 4. https://www.onecaribbean.org/ 5.…”

Section: Declaration Of Conflicting Interestsmentioning

confidence: 99%

The impact of hurricane strikes on cruise ship and airplane tourist arrivals in the Caribbean

et al. 2021

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We investigate the impact of hurricanes on airplane and cruise ship arrivals in the Caribbean. To this end, we construct a monthly panel of airline and cruise ship arrivals and hurricane destruction and employ a panel vector autoregressive model with an exogenous shock (VARX) to quantify the dynamic effects of tourist arrivals after a hurricane for 18 Caribbean countries over the period 2000–2013. The results suggest an immediate decline in the month of a strike and up to one month after on cruise ship (2.33 and 1.21 percentage points) and airplane (0.57 and 0.27 percentage points) arrivals. Moreover, a strong recovery in airplane arrivals in months 3–6 following a hurricane was sufficient to induce a net positive effect of around 2 percentage points of total tourist arrivals into the region.

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Differential Fiscal Performances of Plausible Disaster Events: A Storyline Approach for the Caribbean and Central American Governments under CCRIF

et al. 2023

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Fiscal resilience against disasters is vital for the recovery in the aftermath of climate hazards. Without swift access to available funds for disaster relief, damages to human and the economy would be further exacerbated. How insurance may influence fiscal performance over time and can increase fiscal resilience for today and under a future climate has not been looked at yet in detail. Focusing on the Caribbean region and on the fiscal performance of governments after disaster events, we empirically analyze the effectiveness of the Caribbean Catastrophe Risk Insurance Facility (CCRIF) regarding the reduction of short-term fiscal effects. We embed this analysis within a novel climate impact storyline approach where we produce past plausible events and investigate the usefulness of insurance under such events. The storylines were modified according to global and climate change related boundary conditions to address the issue whether the CCRIF is fit for purpose or will need to be adapted in the future. We found that both hurricane strikes and the CCRIF affect fiscal outcomes of Caribbean countries. Furthermore, there are indications that CCRIF can counteract the negative fiscal consequences over the short term period induced by the disaster. Our analysis should shed some light on the current discussions on how development related assistance can be structured to enhance climate resilience in highly exposed countries for both direct and fiscal impacts of disasters.

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Fiscal shortage risk and the potential role for tropical storm insurance: evidence from the Caribbean

Cited by 6 publications

References 23 publications

Are Disasters a Risk to Regional Fiscal Balance? Evidence from Indonesia

Are Disasters a Risk to Regional Fiscal Balance? Evidence from Indonesia

The impact of hurricane strikes on cruise ship and airplane tourist arrivals in the Caribbean

Differential Fiscal Performances of Plausible Disaster Events: A Storyline Approach for the Caribbean and Central American Governments under CCRIF

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