Managing disaster-related contingent liabilities in public finance frameworks

Catherine Gamper, Benedikt Signer, Luis Alton and Murray Petrie ()
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Catherine Gamper: OECD
Benedikt Signer: The World Bank
Luis Alton: The World Bank

No 27, OECD Working Papers on Public Governance from OECD Publishing

Abstract: Natural disasters have caused, and continue to cause, a significant amount of economic costs. The costs of disasters are often, and to a large extent, shouldered by governments, especially in economies where private insurance markets are not well developed. Governments are asked to provide financing for explicit commitments made prior to a disaster, and are often under pressure to make payments for which no such commitments were made earlier. Ex-post costs to governments take the form of contingent liabilities within national budgeting and government balance sheet frameworks. Disasters can thereby cause both downside risks to government revenue as well as to expenditure. There is little evidence, and hence limited policy advice, on how disaster-related contingent liabilities are managed by governments. This paper sets out to clarify the concept of contingent liabilities and the channels through which they can impact government balance sheets, including fiscal risks. It provides a framework for identifying and quantifying disaster-related contingent liabilities with a view to inform country case studies for comparative policy analysis.

Keywords: contingent liabilities; disaster risk financing; Disasters; government disaster assistance (search for similar items in EconPapers)
JEL-codes: H12 H3 H54 H63 H68 H7 H81 H84 (search for similar items in EconPapers)
Date: 2017-06-07
New Economics Papers: this item is included in nep-ias
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Persistent link: https://EconPapers.repec.org/RePEc:oec:govaaa:27-en

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