Fiscal Resilience to Natural Disasters

Description

Foreword Acknowledgements Acronyms and abbreviations Executive Summary Key findings Policy recommendations Introduction Notes Part I: Synthesis Chapter 1. Understanding the economic and fiscal impacts of disasters The economic impacts of disasters: Disaster losses and damages on the rise Inverse relation of disaster impacts to income The fiscal impacts of disasters: Understanding the key determinants The determinants of fiscal impacts of disasters Disaster impacts on government spending: Explicit contingent liabilities Disaster impacts on government spending: Implicit contingent liabilities Disaster impacts on government revenues Indirect fiscal impacts of disasters Past fiscal impacts of disasters Fiscal impacts of major historical disasters The 2011 Great East Japan Earthquake The 2010–11 Canterbury earthquake sequence in New Zealand The 2016 Fort McMurray wildfire in Canada Notes References Chapter 2. Boosting financial resilience against disasters: Towards better management of disaster-related contingent liabilities Introduction Identification of disaster-related contingent liabilities Distinguishing explicit from implicit contingent liabilities Explicit government commitments for disaster assistance: A range of policies and practices Commitments for recovering and replacing central versus subnational public infrastructure assets Limited government assistance for state-owned enterprises or PPPs Varying government commitment to support household recovery The role of post-disaster financial support to businesses in limiting a disaster’s economic impact Governments’ limited effort to encourage disaster prevention by businesses Tailored support to the agricultural sector A rising trend in implicit government commitments due to extreme events Tendency of implicit contingent liabilities to be greater where explicit commitments ex ante are limited Quantification of disaster-related contingent liabilities Direct estimation of disaster-related contingent liabilities Estimation of disaster-related contingent liabilities through probabilistic modelling Governments’ compilation of information to estimate their liabilities Estimation of fiscal impacts of disaster-related contingent liabilities and their integration in overall fiscal forecasting and fiscal risk assessments Practices showing strong recognition of major disasters in overall fiscal management Benefits of increasing visibility in the fiscal policy-making process Disclosing government’s disaster-related contingent liabilities Notes References Chapter 3. Mitigating disaster-related contingent liabilities and financing residual risks: Policy lessons Cost-sharing mechanisms between central and subnational governments Cost-sharing mechanisms between government and private actors Managing remaining fiscal risk through multi-pronged financial protection strategies References Part II: Case Studies Australia Prevalence of natural hazards Past fiscal impacts of disasters Managing disaster-related contingent liabilities Identification of disaster-related contingent liabilities Explicit contingent liabilities Implicit contingent liabilities Estimation of insurance payouts Quantification of disaster-related contingent liabilities Estimating the fiscal impacts of disaster-related contingent liabilities and integrating them into overall fiscal forecasting Implementation arrangements for providing post-disaster financial assistance Mitigating disaster-related contingent liabilities and financing residual risks Notes References Canada Prevalence of natural hazards Past fiscal impact of disasters Managing disaster-related contingent liabilities Identification of disaster-related contingent liabilities Explicit contingent liabilities Implicit contingent liabilities Estimation of insurance payouts Quantification of disaster-related contingent liabilities Estimating the fiscal impacts of disaster-related contingent liabilities and integrating them into overall fiscal forecasting Implementation arrangements for providing post-disaster financial assistance For assistance distributed to agricultural producers via the AgriRecovery framework, provincial and territorial governments can launch a request to Agriculture and Agri-Food Canada, the federal agency charged with administration of this programme. Th... Notes References Colombia Prevalence of natural hazards Past fiscal impacts of disasters Managing disaster-related contingent liabilities Identification of disaster-related contingent liabilities Explicit contingent liabilities Implicit contingent liabilities Estimation of insurance payouts Quantification of disaster-related contingent liabilities Estimating the fiscal impacts of disaster-related contingent liabilities and integrating them into overall fiscal forecasting Implementation arrangements for providing post-disaster financial assistance Mitigating disaster-related contingent liabilities and financing residual risks References Costa Rica Prevalence of natural hazards Past fiscal impacts of disasters Managing disaster-related contingent liabilities Identification of disaster-related contingent liabilities Explicit contingent liabilities Implicit contingent liabilities Estimation of insurance payouts Quantification of disaster-related contingent liabilities Estimating the fiscal impacts of disaster-related contingent liabilities and integrating them into overall fiscal forecasting Implementation arrangements for providing post-disaster financial assistance Mitigating disaster-related contingent liabilities and financing residual risks References France Prevalence of natural hazards Past fiscal impact of disasters Managing disaster-related contingent liabilities Identification of disaster-related contingent liabilities Explicit contingent liabilities Implicit contingent liabilities Estimation of insurance pay-outs Quantification of disaster-related contingent liabilities Estimation of fiscal impacts of disaster-related contingent liabilities and their integration in overall fiscal forecasting Implementation arrangements for providing post-disaster financial assistance Mitigating disaster-related contingent liabilities and financing residual risks Notes References Japan Prevalence of natural hazards Past fiscal impact of disasters Managing disaster-related contingent liabilities Identification of disaster-related contingent liabilities Explicit contingent liabilities Implicit contingent liabilities Estimation of insurance payouts Quantification of disaster-related contingent liabilities Estimating the fiscal impacts of disaster-related contingent liabilities and integrating them into overall fiscal forecasting Implementation arrangements for providing post-disaster financial assistance Mitigating disaster-related contingent liabilities and financing residual risks Notes References Mexico Prevalence of natural hazards Past fiscal impacts of disasters Managing disaster-related contingent liabilities Identification of disaster-related contingent liabilities Explicit contingent liabilities Implicit contingent liabilities Estimation of insurance payouts Quantification of disaster-related contingent liabilities Disclosure of information on disaster-related contingent liabilities Estimating the fiscal impacts of disaster-related contingent liabilities and integrating them into overall fiscal forecasting Implementation arrangements for providing post-disaster financial assistance Mitigating disaster-related contingent liabilities and financing residual risks Notes References New Zealand Prevalence of natural hazards Past fiscal impacts of disasters Managing disaster-related contingent liabilities Identification of disaster-related contingent liabilities Explicit contingent liabilities Implicit contingent liabilities Estimation of insurance payouts Quantification of disaster-related contingent liabilities Estimating the fiscal impacts of disaster-related contingent liabilities and integrating them into overall fiscal forecasting Implementation arrangements for providing post-disaster financial assistance Mitigating disaster-related contingent liabilities and financing residual risks Notes References Peru Prevalence of natural hazards Managing disaster-related contingent liabilities Identification of disaster-related contingent liabilities Explicit contingent liabilities Implicit contingent liabilities Estimation of insurance payouts Quantification of disaster-related contingent liabilities Estimating the fiscal impacts of disaster-related contingent liabilities and integrating them into overall fiscal forecasting Implementation arrangements for providing post-disaster financial assistance Mitigating disaster-related contingent liabilities and financing residual risks References