Natural disasters and economic growth in Northeast Brazil: evidence from municipal economies of the Ceará State

Based on an unexplored data set on disasters in Brazil, the current study shows that the direct damage of natural disasters reduces the GDP growth rate of municipal economies in Ceará state, Northeast Brazil. The agriculture and service sectors are the most affected economic sectors, while the indus...

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Bibliographic Details
Published in:Environment and development economics 2019-06, Vol.24 (3), p.271-293
Main Author: de Oliveira, Victor Hugo
Format: Article
Language:English
Subjects:
Agriculture
Agronomy
Civil defense
Climate change
Developing countries
Disasters
Drought
Economic development
Economic growth
Economic models
Economic sectors
Economics
Family farms
Family income
GDP
Gross Domestic Product
Human influences
Infrastructure
LDCs
Local government
Low income groups
Municipalities
Natural disasters
Population
Precipitation
Public policy
Public works
Rural areas
Water shortages
Water supply
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Summary:Based on an unexplored data set on disasters in Brazil, the current study shows that the direct damage of natural disasters reduces the GDP growth rate of municipal economies in Ceará state, Northeast Brazil. The agriculture and service sectors are the most affected economic sectors, while the industrial sector remains unaffected by environmental shocks. Economic growth is particularly responsive to the occurrence of large natural disasters that lead municipalities to declare a state of emergency or public calamity. Regarding public policies, water supply infrastructure increases the resilience of the output growth of services to droughts, whereas disaster microinsurance helps to mitigate the effects of droughts and floods on the economic growth of agriculture in a Brazilian state where family farming is predominant and highly vulnerable to natural disasters.
ISSN:1355-770X
1469-4395
DOI:10.1017/S1355770X18000517