Cost Benefit Studies on Disaster Risk Reduction in Developing Countries

The focus of development actors working
in the area of disaster management has shifted substantially
from disaster recovery to disaster risk reduction over the
past decade, coinciding with the decade of the Hyogo
Framework for Action (HFA) 2005-2015. Amidst this strategic
shift, there is now the need to work towards ensuring that
investments made to reduce disaster risks are cost-effective
and that the benefits reach all members of the population
including the poor and vulnerable, who are often
'affected disproportionately' (Global Assessment
Report 2009, The Sendai Report 2012). The losses from
natural disasters to mankind are undoubtedly massive-on
average, globally every year over 100,000 people were killed
and some 246 million people affected by natural disasters
during the period 2002-2011 and the estimated average
economic loss was US$131 billion per year. The purpose of
this note is to briefly survey existing evidence in
developing countries with regard to the benefits and costs
of various disaster risk reduction interventions so as to
provide some general lessons for Disaster Risk Reduction
(DRR) practitioners on the strengths and limitations of such
existing work. In doing so, this note examines evidence on
the economics of DRR in developing countries. The note
begins by providing a comparative guideline for analysis.
This is followed by a summary diagnostic of seventeen case
studies along five key dimensions comprising the guideline
as follows: 1) metric and methodology, 2) sources of
uncertainty, 3) measuring fatalities and injuries, 4)
results obtained, and 5) disaggregated impacts. In the
concluding section that follows, the note discusses the
overall trends in the field of performing cost and benefits
analysis of DRR measures and offers some recommendations for
ways forward.