Impact of Behavioral Issues on Green Growth Policies and Weather-Related Disaster Reduction in Developing Countries
This paper focuses on how developing countries can change the way they prepare for disasters so they are better equipped to sustain economic growth. It discusses the importance of considering the goals of key decision makers and the need to underst...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/10/16840538/impact-behavioral-issues-green-growth-policies-weather-related-disaster-reduction-developing-countries http://hdl.handle.net/10986/12073 |
| Summary: | This paper focuses on how developing
countries can change the way they prepare for disasters so
they are better equipped to sustain economic growth. It
discusses the importance of considering the goals of key
decision makers and the need to understand the perceptions,
systematics biases, and heuristics used by the relevant
interested parties (the affected public, private and public
sector organizations, and nongovernmental organizations) in
choosing between alternatives. The paper highlights the
importance of undertaking benefit-cost analysis to evaluate
disaster risk reduction measures, recognizing that decision
makers might not make meaningful use of this policy tool
given their behavioral biases and simplified heuristics. To
address these issues, the authors propose green growth
strategies that involve multi-year contracts coupled with
short-term incentives that have a chance of being
implemented. The strategies focus on the role of multi-year
micro-insurance, long-term loans, and multi-year catastrophe
bonds that reflect the institutional arrangements in the
developing country. The paper illustrates this proposal in
the case of farmers' agricultural practices and
investment decisions that reduce losses to property from
catastrophic disasters such as drought. |
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