IDEAS home Printed from https://ideas.repec.org/a/jda/journl/vol.50year2016issue1pp103-122.html
   My bibliography  Save this article

The high cost of low quality infrastructure when natural disasters strike

Author

Listed:
  • Monica Escaleras
  • Charles Register

    (Florida Atlantic University, USA)

Abstract

There is clear evidence embedded in the geological record of natural disasters such as volcanic activity, earthquakes, floods, hurricanes and the like striking earth for many millennia. Interestingly and for as yet unknown reasons, there has been a fourfold increase in such disasters over the last four decades. While the reason or reasons for this spike is yet to be understand (randomness, long-term trends or perhaps global warming), it has led to a great deal of research into the relationships between natural disasters and socio-economic factors. While many could be listed, research into whether disasters spawn public sector corruption, how effective mitigation actions such as tidal buoys and seismographs can prove to be, whether institutions such as property rights play a role in determining a disaster’s devastation and the impact of disasters on differing country’s economic growth serve as good examples. We add to this literature by considering the seemingly obvious relationship between the quality of a country’s infrastructure and deaths due to disasters which to date has not been tested as there has been no consistent, cross-country measure of infrastructure quality. To be sure, our expectation is that quality infrastructure mitigates disasters but it is this missing link in the research that we seek to fill. To provide a direct test of the importance of infrastructure, we consider 126 countries that experienced at least one natural disaster during the period 2005-2012. The data on disasters is taken from the EM-DAT archive, collected and maintained by the non-profit institution Centre for Research on the Epidemiology of Disasters (CRED). The uniqueness of the analysis is made possible by the use of the only consistent, cross-country measure of infrastructure quality recently made available by the World Economic Forum’s annual Global Competitiveness Report. Given that the key dependent variable throughout is a count of deaths, the empirical analyses are based on a series of Negative Binomial panel models. As expected, we find consistent, negative and strong statistically significant relationships between a country’s infrastructure quality and deaths due to disasters. Thus, the results suggest that when decision-making takes place within a country with respect to how its resources will be spent, investments in high-quality infrastructure will certainly yield positive returns when disasters strike. Similarly, governmental and non-governmental agencies that provide development assistance would well serve developing countries through loans and grants designed to provide funding for the development of high-quality infrastructure.

Suggested Citation

  • Monica Escaleras & Charles Register, 2016. "The high cost of low quality infrastructure when natural disasters strike," Journal of Developing Areas, Tennessee State University, College of Business, vol. 50(1), pages 103-122, January-M.
  • Handle: RePEc:jda:journl:vol.50:year:2016:issue1:pp:103-122
    as

    Download full text from publisher

    File URL: http://muse.jhu.edu/article/609326
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Monica P. Escaleras & Charles A. Register, 2008. "Mitigating Natural Disasters through Collective Action: The Effectiveness of Tsunami Early Warnings," Southern Economic Journal, John Wiley & Sons, vol. 74(4), pages 1017-1034, April.
    2. Jesus Crespo Cuaresma, 2010. "Natural Disasters and Human Capital Accumulation," The World Bank Economic Review, World Bank, vol. 24(2), pages 280-302, July.
    3. Claude Berrebi & Jordan Ostwald, 2011. "Earthquakes, hurricanes, and terrorism: do natural disasters incite terror?," Public Choice, Springer, vol. 149(3), pages 383-403, December.
    4. Russell Sobel & Peter Leeson, 2006. "Government's response to Hurricane Katrina: A public choice analysis," Public Choice, Springer, vol. 127(1), pages 55-73, April.
    5. Mwangi Kimenyi & William Shughart, 2010. "The political economy of constitutional choice: a study of the 2005 Kenyan constitutional referendum," Constitutional Political Economy, Springer, vol. 21(1), pages 1-27, March.
    6. Monica Escaleras & Charles A. Register, 2011. "Natural Disasters and Foreign Direct Investment," Land Economics, University of Wisconsin Press, vol. 87(2), pages 346-363.
    7. Keefer, Philip & Neumayer, Eric & Plümper, Thomas, 2011. "Earthquake Propensity and the Politics of Mortality Prevention," World Development, Elsevier, vol. 39(9), pages 1530-1541, September.
    8. Toya, Hideki & Skidmore, Mark, 2007. "Economic development and the impacts of natural disasters," Economics Letters, Elsevier, vol. 94(1), pages 20-25, January.
    9. William Shughart, 2006. "Katrinanomics: The politics and economics of disaster relief," Public Choice, Springer, vol. 127(1), pages 31-53, April.
    10. Hideki Toya & Mark Skidmore, 2014. "Do Natural Disasters Enhance Societal Trust?," Kyklos, Wiley Blackwell, vol. 67(2), pages 255-279, May.
    11. Drago Bergholt & Päivi Lujala, 2012. "Climate-related natural disasters, economic growth, and armed civil conflict," Journal of Peace Research, Peace Research Institute Oslo, vol. 49(1), pages 147-162, January.
    12. Claude Berrebi & Jordan Ostwald, 2011. "Earthquakes, hurricanes, and terrorism: do natural disasters incite terror?," Public Choice, Springer, vol. 149(3), pages 383-403, December.
    13. Mark Skidmore & Hideki Toya, 2002. "Do Natural Disasters Promote Long-Run Growth?," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 664-687, October.
    14. Monica Escaleras & Charles Register, 2012. "Fiscal decentralization and natural hazard risks," Public Choice, Springer, vol. 151(1), pages 165-183, April.
    15. Monica Escaleras & Nejat Anbarci & Charles Register, 2007. "Public sector corruption and major earthquakes: A potentially deadly interaction," Public Choice, Springer, vol. 132(1), pages 209-230, July.
    16. Matthew E. Kahn, 2005. "The Death Toll from Natural Disasters: The Role of Income, Geography, and Institutions," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 271-284, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lee, Chien-Chiang & Wang, Chih-Wei & Ho, Shan-Ju & Wu, Ting-Pin, 2021. "The impact of natural disaster on energy consumption: International evidence," Energy Economics, Elsevier, vol. 97(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eiji Yamamura, 2014. "Impact of natural disaster on public sector corruption," Public Choice, Springer, vol. 161(3), pages 385-405, December.
    2. Chun-Ping Chang & Aziz N. Berdiev, 2015. "Do natural disasters increase the likelihood that a government is replaced?," Applied Economics, Taylor & Francis Journals, vol. 47(17), pages 1788-1808, April.
    3. Yamamura, Eiji, 2011. "Effect of free media on views regarding the safety of nuclear energy after the 2011 disasters in Japan: evidence using cross-country data," MPRA Paper 32011, University Library of Munich, Germany.
    4. Monica Escaleras & Charles Register, 2012. "Fiscal decentralization and natural hazard risks," Public Choice, Springer, vol. 151(1), pages 165-183, April.
    5. Lazzaroni, Sara & van Bergeijk, Peter A.G., 2014. "Natural disasters' impact, factors of resilience and development: A meta-analysis of the macroeconomic literature," Ecological Economics, Elsevier, vol. 107(C), pages 333-346.
    6. Eiji Yamamura, 2013. "Public sector corruption and the probability of technological disasters," Economics of Governance, Springer, vol. 14(3), pages 233-255, August.
    7. Eiji Yamamura, 2012. "Death tolls from natural disasters: Influence of interactions among fiscal decentralization, institutions and economic development," EERI Research Paper Series EERI_RP_2012_08, Economics and Econometrics Research Institute (EERI), Brussels.
    8. Eiji Yamamura, 2010. "Effects of Interactions among Social Capital, Income and Learning from Experiences of Natural Disasters: A Case Study from Japan," Regional Studies, Taylor & Francis Journals, vol. 44(8), pages 1019-1032.
    9. Khurana, Ritika & Mugabe, Douglas & Etienne, Xiaoli L., 2022. "Climate change, natural disasters, and institutional integrity," World Development, Elsevier, vol. 157(C).
    10. Peter A. G. van Bergeijk & Sara Lazzaroni, 2015. "Macroeconomics of Natural Disasters: Strengths and Weaknesses of Meta‐Analysis Versus Review of Literature," Risk Analysis, John Wiley & Sons, vol. 35(6), pages 1050-1072, June.
    11. Yamamura, Eiji, 2012. "Death tolls from natural disasters: Influence of interactions between fiscal decentralization, institution, and economic development," MPRA Paper 36987, University Library of Munich, Germany.
    12. Padli, Jaharudin & Habibullah, Muzafar & Abdul Hamid, Baharom & Musa, Haslina, 2019. "Mitigating Fatalities and Damages Due to Natural Disasters: Do Human Development and Corruption Matters?," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(2), pages 153-164.
    13. Rahman, Muhammad Habibur & Anbarci, Nejat & Ulubaşoğlu, Mehmet A., 2022. "“Storm autocracies”: Islands as natural experiments," Journal of Development Economics, Elsevier, vol. 159(C).
    14. Yamamura, Eiji, 2011. "The changing effect of legal origin on death tolls in natural disasters from 1960 to 2008," MPRA Paper 33112, University Library of Munich, Germany.
    15. Christopher J. Boudreaux & Anand Jha & Monica Escaleras, 2023. "Natural disasters, entrepreneurship activity, and the moderating role of country governance," Small Business Economics, Springer, vol. 60(4), pages 1483-1508, April.
    16. Chun Ping Chang & Aziz N Berdiev, 2013. "Natural Disasters, Political Risk and Insurance Market Development," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 38(3), pages 406-448, July.
    17. Boudreaux, Christopher & Jha, Anand & Escaleras, Monica, 2022. "Natural Disasters and Entrepreneurship Activity: the Moderating Role of Country Governance," MPRA Paper 115134, University Library of Munich, Germany.
    18. Kyosuke Kikuta, 2019. "Postdisaster Reconstruction as a Cause of Intrastate Violence: An Instrumental Variable Analysis with Application to the 2004 Tsunami in Sri Lanka," Journal of Conflict Resolution, Peace Science Society (International), vol. 63(3), pages 760-785, March.
    19. Eiji Yamamura, 2013. "Institution and decomposition of natural disaster impact on growth," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 40(6), pages 720-738, October.
    20. Muhammad Habibur Rahman & Nejat Anbarci & Prasad Sankar Bhattacharya & Mehmet Ali Ulubaşoğlu, 2017. "Can extreme rainfall trigger democratic change? The role of flood-induced corruption," Public Choice, Springer, vol. 171(3), pages 331-358, June.

    More about this item

    Keywords

    Natural Disasters; Quality Infrastructure;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jda:journl:vol.50:year:2016:issue1:pp:103-122. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Abu N.M. Wahid (email available below). General contact details of provider: https://edirc.repec.org/data/cbtnsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.