Hideki Toya

Natural Disaster Impacts and Fiscal Decentralization

In recent years, many developing countries have sought to implement more decentralized governmental systems. Despite efforts toward fiscal federalism, assessment of decentralization activity has been hampered by lack of consistent cross-country measures of effectiveness. Since governments play a central role in the management of catastrophic events, disaster impact data provide an opportunity to evaluate whether government structure is important in limiting disaster losses. We use cross-country data over the 1970–2005 period to estimate the relationship between decentralization and disaster casualties; countries with more decentralized governments experience fewer disaster-induced fatalities. (JEL H73, Q54)

A Reply to “A Replication of “Economic Development and the Impacts of Natural Disasters” (Economics Letters 2007)”

In this reply we offer a response to the Mercer and Reed (2015) replication of Toya and Skidmore (2007). The replication study extends the original work in several important dimensions and is a very useful contribution. Nevertheless, we offer additional evaluation and discussion of the robustness portion of their replication. In particular, we consider the fixed effects and interval regression estimates.