Publication:
Solving Commitment Problems in Disaster Risk Finance

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dc.contributor.authorClarke, Daniel J.
dc.contributor.authorWren-Lewis, Liam
dc.date.accessioned2016-07-07T21:19:00Z
dc.date.available2016-07-07T21:19:00Z
dc.date.issued2016-06
dc.description.abstractThose at risk from natural disasters are typically under-protected, possibly because they expect benefactors such as governments and donors to come to their aid. Yet when relief comes, it is often insufficient, delayed or misallocated. Benefactors may wish to commit to provide an efficient amount of fast well-targeted relief, and leave the rest up to recipients, but such commitments are difficult. This article analyses how transferring risk to third-parties such as private insurers may help resolve these commitment problems. Using a simple model of disaster risk finance is used to identify three distinct commitment problems and then show how various properties of risk transfer schemes can help to resolve these problems. The paper illustrates how these commitment problems play out using examples from around the world, and demonstrates where risk transfer schemes seem to have helped in practice. Overall, the findings show that the benefits of such schemes depend on the relative severity of the different commitment problems.en
dc.identifierhttp://documents.worldbank.org/curated/en/2016/06/26510516/solving-commitment-problems-disaster-risk-finance
dc.identifier.doi10.1596/1813-9450-7720
dc.identifier.urihttps://hdl.handle.net/10986/24638
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 7720
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectRISKS
dc.subjectUNCERTAINTIES
dc.subjectRESCUE
dc.subjectNATURAL DISASTER INSURANCE
dc.subjectEARLY WARNING
dc.subjectPUBLIC ECONOMICS
dc.subjectRISK REDUCTION
dc.subjectWIND SPEED
dc.subjectINCOME
dc.subjectINTEREST
dc.subjectMARGINAL COST
dc.subjectINSURER
dc.subjectINFORMATION
dc.subjectPROGRAMS
dc.subjectREVENUES
dc.subjectWELFARE
dc.subjectINSURANCE POLICIES
dc.subjectLUMP SUM
dc.subjectINCENTIVES
dc.subjectDISASTER
dc.subjectMODELS
dc.subjectPRICING
dc.subjectPRIVATE REINSURANCE
dc.subjectPRIVATE INSURANCE
dc.subjectPRICE
dc.subjectINSURANCE RISK
dc.subjectINFORMATION SYSTEMS
dc.subjectINSURANCE SCHEME
dc.subjectEARTHQUAKES
dc.subjectINSURANCE COMPANY
dc.subjectCATASTROPHE INSURANCE
dc.subjectDISASTER RELIEF
dc.subjectCROP INSURANCE
dc.subjectREINSURERS
dc.subjectSAVINGS
dc.subjectINSURANCE SYSTEMS
dc.subjectRELIEF
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectNATURAL DISASTER
dc.subjectDISASTER RESPONSE
dc.subjectMORAL HAZARD
dc.subjectINSURANCE PRODUCT
dc.subjectINSURANCE PAYOUT
dc.subjectNATURAL DISASTERS
dc.subjectMARKETS
dc.subjectDISASTERS
dc.subjectINSURERS
dc.subjectRATES
dc.subjectACTUARIALLY FAIR INSURANCE
dc.subjectCYCLONES
dc.subjectFAMINE
dc.subjectINSURANCE COVERAGE
dc.subjectINSURANCE POLICY
dc.subjectPUBLIC INSURANCE
dc.subjectFINANCE
dc.subjectBANKS
dc.subjectDRAWN DOWN
dc.subjectTECHNOLOGY
dc.subjectREINSURANCE
dc.subjectCONSUMPTION
dc.subjectTROPICAL CYCLONE
dc.subjectEMERGENCY
dc.subjectEARTHQUAKE
dc.subjectDISASTER REDUCTION
dc.subjectDISASTER RISK
dc.subjectPOLICIES
dc.subjectDROUGHT
dc.subjectINSURANCE SCHEMES
dc.subjectINSURANCE PRODUCTS
dc.subjectCROP INSURANCE SCHEME
dc.subjectVALUE
dc.subjectLOSSES
dc.subjectPOLICY MAKERS
dc.subjectBANK
dc.subjectCREDIT
dc.subjectINSURANCE CONTRACTS
dc.subjectDISASTER RISK FINANCING
dc.subjectCLIMATE
dc.subjectAGRICULTURAL INSURANCE
dc.subjectDEMAND
dc.subjectUTILITY FUNCTION
dc.subjectDROUGHT INSURANCE
dc.subjectCONSUMERS
dc.subjectDAMAGE
dc.subjectDISASTER INSURANCE SCHEME
dc.subjectNATURAL CATASTROPHE
dc.subjectDISASTER INSURANCE
dc.subjectINSURANCE REGULATION
dc.subjectINSURANCE PREMIUM
dc.subjectREGULATION
dc.subjectRISK TRANSFER
dc.subjectPOLICY
dc.subjectWORLD HEALTH ORGANIZATION
dc.subjectINSURANCE
dc.subjectLOSS
dc.subjectAGENTS
dc.subjectRISK INSURANCE
dc.subjectDISASTER AID
dc.subjectHURRICANE
dc.subjectRISK
dc.subjectINDEMNITY
dc.subjectMITIGATION
dc.subjectPRIVATE INSURANCE COMPANIES
dc.subjectTROPICAL CYCLONES
dc.subjectSUPPLY
dc.subjectUNDERWRITING
dc.subjectDISASTER RISK REDUCTION
dc.subjectLAW
dc.subjectINVESTMENTS
dc.subjectRISK MANAGEMENT
dc.subjectCROP INSURANCE PROGRAM
dc.subjectINSURANCE COMPANIES
dc.subjectMARGINAL UTILITY
dc.subjectBASIS RISK
dc.subjectCOVERAGE
dc.subjectRISK ASSESSMENT
dc.subjectBENEFITS
dc.subjectRECONSTRUCTION
dc.subjectRISK MITIGATION
dc.subjectPREMIUMS
dc.titleSolving Commitment Problems in Disaster Risk Financeen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleSolving Commitment Problems in Disaster Risk Finance
okr.date.disclosure2016-06-21
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/2016/06/26510516/solving-commitment-problems-disaster-risk-finance
okr.guid396511468197075071
okr.identifier.doi10.1596/1813-9450-7720
okr.identifier.externaldocumentum090224b0843e9e89_1_0
okr.identifier.internaldocumentum26510516
okr.identifier.reportWPS7720
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2016/06/21/090224b0843e9e89/1_0/Rendered/PDF/Solving0commit0isaster0risk0finance.pdfen
okr.topicFinance and Financial Sector Development::Insurance & Risk Mitigation
okr.topicEnvironment::Natural Disasters
okr.topicSocial Protections and Labor::Safety Nets and Transfers
okr.unitDisaster Risk Financing and Insurance Program (DRFIP)
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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