Natural disasters in Latin America and the Caribbean: an overview of risk

Working Paper, no. 434.

In the last five years, the Latin American and Caribbean region suffered from several large natural disasters whose magnitude, in terms of fatalities and damages, has renewed national governments’ and international donors’ interest in better managing risk.

The first section analyzes the characteristics of the risk of natural disasters by studying their impact on household and aggregate welfare, trends in terms of frequency and impact, and their geographical distribution. Through the analysis of the specific sources of natural disasters in the region, the second section shows that disaster occurrence in the region is as much the result of the unavoidable effects of the region’s geographical conditions as a side effect of the pattern of regional development and inadequate policies. This duality of risk has important policy implications. After presenting risk management options available to households and public policy, the third section analyzes the risk management practices in the region.