 Tropical cyclones and post-disaster reconstruction of public infrastructure in developing countriesChristopher Adam and David Bevan Economic Modelling, 2020, vol. 93, issue C, 82-99 Abstract: When natural disasters destroy public capital, these direct losses are exacerbated by indirect losses arising from reduced private output during reconstruction. These may be large in developing countries that lack access to external finance. We develop a general equilibrium model of a small open economy that highlights the relation between public infrastructure and private capital, to examine the effects of natural disasters and alternative reconstruction paths. Calibrating the model to data from the Caribbean Catastrophic Risk Insurance Facility (CCRIF), we examine alternative post-disaster financing mechanisms including reserve depletion, budget reallocation, sovereign disaster insurance, debt and taxation. Disaster insurance is shown to play a limited role in financing reconstruction, while budget re-allocations are potentially damaging especially if they cannibalize operations and maintenance expenditures. Absent donor grants or concessional borrowing, tax financing – where feasible – remains the least damaging financing instrument, particularly if the country risk premium on external debt is high. Keywords: H54; Q54; E60 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:93:y:2020:i:c:p:82-99 DOI: 10.1016/j.econmod.2020.07.003 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.