What Promotes Post-Earthquake Economic Recovery: The Role of Counterpart Assistance Policy After the Wenchuan Ms 8.0 Earthquake, China

Li Peng, Qianyu Li, Wei Deng and Ying Liu

SAGE Open, 2021, vol. 11, issue 3, 21582440211033573

Abstract: Despite the economic statistics from recent years indicating outstanding economic recovery in disaster-affected areas after the Wenchuan Ms 8.0 Earthquake, the causes of these macro-economic changes remain ambiguous. The Chinese Government set up the counterpart assistance policy to aid post-disaster reconstruction after the Wenchuan Ms 8.0 Earthquake in 2008; however, whether the changes seen in the economic statistics can be attributed to this policy remains unclear. This article uses the difference-in-differences model to evaluate the effects of counterpart assistance on economic development in disaster areas. Thirty-nine severely affected counties were chosen as research objects and divided into a treatment group (18 recipient counties) and a control group (non-recipient counties). Empirical results indicate the counterpart assistance policy helped to significantly improve the real GDP and GDP growth rate per capita in the treatment group. Counterpart assistance influenced the real GDP principally by increasing investment in fixed assets, employment, urbanization level, and fiscal expenditure. The findings of this study deepen our understanding of counterpart assistance within the Chinese context.

Keywords: counterpart assistance; policy effect; difference-in-differences model; economic growth; Wenchuan Earthquake (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:11:y:2021:i:3:p:21582440211033573

DOI: 10.1177/21582440211033573

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