Analysing the characteristics of post-disaster funding that make it susceptible to the risk of economic crime: a South African frame of reference

Nina Du Toit, Philip Steenkamp, Dewald van Niekerk and Andre Groenewald

Journal of Financial Crime, 2024, vol. 32, issue 2, 304-320

Abstract: Purpose - Research indicates a significant risk of economic crime associated with post-disaster funding. The purpose of this paper is to assess the characteristics of post-disaster funding that make it susceptible to the risk of economic crime and to analyse how the statutory and regulatory disaster risk management instruments of South Africa aim to manage post-disaster events. Design/methodology/approach - This paper uses secondary sources such as, but not limited to, legislation, institutional reports, textbooks and peer-reviewed academic journal articles. Findings - Post-disaster funding is inherently susceptible to economic crime due to characteristics identified such as time pressure; substantial inflow of money, goods and services; inadequate needs assessment, large-scale reconstruction and the involvement of contractors or suppliers; power imbalance; and the responsibility of governments. The Disaster Management Act and National Disaster Management Framework provide an extensive regulatory framework for mitigating post-disaster funding risks by attempting to find a balance between quick aid distribution and financial controls. This paper finds that even though South Africa is known to have some of the best disaster risk management laws, the pervasive nature of the characteristics could still render post-disaster funding structures susceptible to the risk of economic crime. Originality/value - There is limited scientific research on this topic. The expected prevalence of future disasters requires the regulatory and legislative disaster risk management instruments to evolve concomitantly. Research on this topic must continue to ensure that risks associated with post-disaster funding and its susceptibility to economic crime can be mitigated as far as possible.

Keywords: Economic crime; Post-disaster funding; Disaster risk management; Disaster Management Act; National Disaster Management Framework; South Africa (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-03-2024-0099

DOI: 10.1108/JFC-03-2024-0099

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