Publication: The Fragility and Resilience of Nations
Date
2023-03
ISSN
Published
2023-03
Author(s)
Karayalcin, Cem
Onder, Harun
Abstract
Climate change will impose large and
differentiated tolls across countries. This paper suggests
that economic fragility and resilience against climate
change-driven natural shocks are shaped by: (i) the
elasticity of input substitution in resource-intensive
sectors, (ii) the trade regime, and (iii) the property
rights regime in nature-based assets. Using a structural
transformation model, the paper shows, inter alia, that
openness increases resilience against natural shocks,
regardless of the property right regime. Additionally,
openness reduces fragility when a social planner
internalizes the social cost of natural resource
degradation. However, it increases fragility in a
decentralized economy with incomplete property rights in
nature-based assets.
Citation
“Karayalcin, Cem; Onder, Harun. 2023. The Fragility and Resilience of Nations. Policy Research Working Papers; 10362. © World Bank, Washington, DC. http://hdl.handle.net/10986/39542 License: CC BY-NC 3.0 IGO.”