Strategies and financial instruments for disaster risk management in Latin America and the Caribbean
Sustainable Development Department Technical papers series, ENV-145
This paper investigates potential avenues for reducing economic losses resulting from natural hazards, and discusses ex ante and ex post issues affecting disaster risk management. It also assesses how both types of measures can be jointly used to reduce the economic impact of disasters on sovereign governments and the IDB. The authors argue in favour of a balanced risk management strategy, which utilizes both ex ante and ex post measures to manage different risk layers. Effective reduction of disaster risk can be aided by a risk management policy that appropriately identifies at-risk parties, the level of risk, and the available responses. The bulk of the paper treats these topics in the context of the institutional and incentive issues that may affect their implementation.