 Natural Disasters and Financial Implications for Subnational Governments: Evidence from ChinaQing Miao, Can Chen, Yi Lu and Michael Abrigo Public Finance Review, 2020, vol. 48, issue 1, 72-101 Abstract: Because of their uncertain and destructive nature, natural disasters can pose severe shocks to societies and jurisdictions across all levels of government. Disaster-related financial risk is a critical problem in developing countries where people are highly vulnerable to the losses of natural hazards and climate change. This study empirically examines the fiscal impact of natural disasters at the provincial government level in China. Using a panel vector autoregression model, we find that natural disasters increase a province’s total governmental spending and intergovernmental revenues received from the central government while having little effect on its tax revenues. In particular, earthquakes and tropical storms cause larger impacts on spending and intergovernmental transfers. We also show that governments in higher-income Chinese provinces experience larger increases in spending and intergovernmental transfer following natural disasters than lower-income provincial governments. Our results provide important implications for the financial management of disaster risks in the developing context. Keywords: natural disasters; public finance; intergovernmental relations; disaster policy; China (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:sae:pubfin:v:48:y:2020:i:1:p:72-101 Access Statistics for this article More articles in Public Finance Review |
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