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Natural Disaster Impacts and Fiscal Decentralization
- Land Economics
- University of Wisconsin Press
- Volume 89, Number 1, February 2013
- pp. 101-117
- Article
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In recent years, many developing countries have sought to implement more decentralized governmental systems. Despite efforts toward fiscal federalism, assessment of decentralization activity has been hampered by lack of consistent cross-country measures of effectiveness. Since governments play a central role in the management of catastrophic events, disaster impact data provide an opportunity to evaluate whether government structure is important in limiting disaster losses. We use cross-country data over the 1970–2005 period to estimate the relationship between decentralization and disaster casualties; countries with more decentralized governments experience fewer disaster-induced fatalities. (JEL H73, Q54)