When is a natural disaster a development disaster; when is a natural disaster not a disaster?
Abstract
Extremes of nature like hurricanes, droughts and earthquakes influence human welfare in a variety of ways. While it might seem counterintuitive, evidence from long run macro-economic data suggests that when natural extremes are especially destructive to human societies, and earn the title “natural disaster” they can actually have a beneficial effect on development. The process involved may be akin to the “The gale of creative destruction” first described by the economist Joseph Schumpeter. Applied to disasters the notion is that, in the short term, disasters can stimulate certain industries such as construction with capital flows coming into the disaster region from outside sources such as central government or international aid that can stimulate the economy. Longer term, outdated and inefficient public and private infrastructure destroyed in the disaster can be replaced by up to date, efficient systems that permit the economy to function more effectively, so that post-disaster growth can exceed pre-disaster levels. Disasters are macro-economic shocks, fundamentally similar to the banking shock that lead to the current global recession and, in the same way require external capital stimuli to overcome and that stimulus can result in stronger economies after recovery. These large-scale and long-run trends disguise the fact that disasters have very different development outcomes for different societies. Globally, there is evidence that poorer countries are not systematically stimulated by disaster shocks and may even be driven into poverty traps by certain disasters. Locally, the recovery from Hurricane Katrina in New Orleans has had been very different for different social groups, with both over-recovery and under-recovery occurring simultaneously and in close proximity. We discuss the conditions under which disasters might be a stimulating force and when they might lead to development setbacks.
- Publication:
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AGU Fall Meeting Abstracts
- Pub Date:
- December 2009
- Bibcode:
- 2009AGUFM.U11A0011M
- Keywords:
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- 1600 GLOBAL CHANGE;
- 1630 GLOBAL CHANGE / Impacts of global change;
- 6304 POLICY SCIENCES / Benefit-cost analysis;
- 9810 GENERAL OR MISCELLANEOUS / New fields