Hostname: page-component-586b7cd67f-dlnhk Total loading time: 0 Render date: 2024-11-22T07:44:44.518Z Has data issue: false hasContentIssue false
  • English
  • Français

Natural disasters and economic growth in Northeast Brazil: evidence from municipal economies of the Ceará State

Published online by Cambridge University Press:  30 January 2019

Victor Hugo de Oliveira Open the ORCID record for Victor Hugo de Oliveira [Opens in a new window]
Victor Hugo de Oliveira*
Affiliation:
Instituto de Pesquisa e Estratégia Econômica do Ceará (IPECE), Fortaleza, Ceará, Brasil
*
*Corresponding author. E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Based on an unexplored data set on disasters in Brazil, the current study shows that the direct damage of natural disasters reduces the GDP growth rate of municipal economies in Ceará state, Northeast Brazil. The agriculture and service sectors are the most affected economic sectors, while the industrial sector remains unaffected by environmental shocks. Economic growth is particularly responsive to the occurrence of large natural disasters that lead municipalities to declare a state of emergency or public calamity. Regarding public policies, water supply infrastructure increases the resilience of the output growth of services to droughts, whereas disaster microinsurance helps to mitigate the effects of droughts and floods on the economic growth of agriculture in a Brazilian state where family farming is predominant and highly vulnerable to natural disasters.

Keywords

BrazilCearáeconomic growthnatural disastersO44Q54
Type
Research Article
Information
Environment and Development Economics , Volume 24 , Issue 3 , June 2019 , pp. 271 - 293
Copyright
Copyright © Cambridge University Press 2019 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Albala-Bertrand, JM (1993) Political Economy of Large Natural Disasters. Oxford, UK: Clarendon Press.Google Scholar
Anttila-Hughes, JK and Hsiang, SM (2013) Destruction, Disinvestment, and Death: Economic and Human Losses Following Environmental Disaster. Working paper, Berkeley, CA: University of California.Google Scholar
Arellano, M and Bond, S (1991) Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies 58, 277–297.Google Scholar
Arellano, M and Bover, O (1995) Another look at the instrumental variable estimation of error-components models. Journal of Econometrics 68, 29–52.Google Scholar
Arouri, M, Nguyen, C and Youssef, AB (2015) Natural disasters, household welfare, and resilience: evidence from rural Vietnam. World Development 70, 59–77.Google Scholar
Assunção, J and Chein, F (2016) Climate change and agriculture productivity in Brazil: future perspectives. Environmental and Development Economics 21, 1–22.Google Scholar
Barro, RJ (1990) Government spending in a simple model of endogenous growth. Journal of Political Economy 98, S103–S125.Google Scholar
Bedran-Martins, AM and Lemos, MC (2017) Politics of drought under Bolsa Família program in Northeast Brazil. World Development Perspectives 7–8, 15–21.Google Scholar
Blundell, R and Bond, S (1998) Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics 87, 115–143.Google Scholar
Carter, MR, Little, PD, Mogues, T and Negatu, W (2006) Poverty traps and natural disasters in Ethiopia and Honduras. World Development 35, 835–856.Google Scholar
Cavallo, E and Noy, I (2011) Natural disasters and the economy – a survey. International Review of Environmental and Resource Economics 5, 63–102.Google Scholar
Cavallo, E, Galiani, S, Noy, I and Pantano, J (2013) Catastrophic natural disasters and economic growth. The Review of Economics and Statistics 95, 1549–1561.Google Scholar
Centro Universitário de Estudos e Pesquisas em Desastres (2013) Atlas brasileiro de desastres naturais – 1991 a 2012. Available at https://s2id.mi.gov.br/paginas/atlas/ (in Portuguese).Google Scholar
Centro Universitário de Estudos e Pesquisas em Desastres (2016) Relatório dos danos materiais e prejuízos decorrentes de desastres naturais em Santa Catarina: 1995–2014. Available at http://www.ceped.ufsc.br/relatorio-dos-danos-materiais-e-prejuizos-decorrentes-de-desastres-naturais-em-santa-catarina/ (in Portuguese).Google Scholar
Ceratti, M (2013) Better water supply for Northeast Brazil. World Bank. Available at http://www.worldbank.org/en/results/2013/04/03/Brazil-Northeast-Ceara-water-resources-management-project.Google Scholar
Chimeli, AB, de Souza Filho, FA, Holanda, MC and Petterini, FC (2008) Forecasting the impacts of climate variability: lessons from the rainfed corn market in Ceará, Brazil. Environment and Development Economics 13, 201–227.Google Scholar
Clarke, DJ and Grenham, D (2013) Microinsurance and natural disasters: challenges and options. Environment Science & Policy 27S, S89–S98.Google Scholar
Coffman, M and Noy, I (2012) Hurricane Iniki: measuring the long-term economic impact of a natural disaster using synthetic control. Environment and Development Economics 17, 187–205.Google Scholar
Cuaresma, JC, Hlouskova, J and Obersteiner, M (2008) Natural disasters as creative destruction? Evidence from developing countries. Economic Inquiry 46, 214–226.Google Scholar
Cummins, JD and Mahul, O (2009) Catastrophe Risk Financing in Developing Countries: Principles for Public Interventions. Washington, DC: The World Bank.Google Scholar
Cunado, J and Ferreira, S (2014) The macroeconomic impacts of natural disasters: the case of floods. Land Economics 90, 149–168.Google Scholar
de Lima, RCA and Barbosa, AV (2018) Natural disasters, economic growth and spatial spillovers: evidence from flash floods in Brazil. Papers in Regional Science. doi:10.1111/pirs.12380.Google Scholar
de Oliveira, VH and Quintana-Domeque, C (2016) Natural disaster and early human development: Hurricane Catarina and birth outcomes in Brazil. Available at https://drive.google.com/file/d/1h2znPlOFIBU3tTheMUF9wsqMvIFRLoMe/view.Google Scholar
Drabo, A and Mbaye, LM (2015) Natural disasters, migration and education: an empirical analysis in developing countries. Environment and Development Economics 20, 767–796.Google Scholar
duPont, IV W, Noy, I, Okuyama, Y and Sawada, Y (2015) The long-run socio-economic consequences of a large disaster: the 1995 earthquake in Kobe. PLoS ONE 10, e0138714.Google Scholar
Durlauf, SN, Johnson, PA and Temple, JRW (2005) Growth econometrics. In Aghion, P and Durlauf, SN (eds), Handbook of Economic Growth, vol. 1A. Amsterdam: Elsevier, pp. 555–677.Google Scholar
Felbermayr, G and Gröschl, J (2014) Naturally negative: the growth effects of natural disasters. Journal of Development Economics 111, 92–106.Google Scholar
Ferreira Filho, JBS and de Moraes, GI (2014) Climate change, agriculture and economic effects on different regions of Brazil. Environment and Development Economics 20, 37–56.Google Scholar
Fomby, T, Ikeda, Y and Loayza, N (2011) The growth aftermath of natural disasters. Journal of Applied Econometrics 28, 412–434.Google Scholar
Ghimire, R and Ferreira, S (2015) Floods and armed conflict. Environment and Development Economics 21, 23–53.Google Scholar
Gray, C and Mueller, V (2012) Drought and population mobility in rural Ethiopia. World Development 40, 134–145.Google Scholar
Guilhoto, JJM, Azzoni, CR and Ichihara, SM (2009) A participação da agricultura familiar no PIB do Ceará. MPRA Paper No. 30691. Available at https://mpra.ub.uni-muenchen.de/30691/1/MPRA_paper_30691.pdf (in Portuguese).Google Scholar
Gutiérrez, AP, Engle, NL, Nys, E, Molejón, C and Martins, ES (2014) Drought preparedness in Brazil. Weather and Climate Extremes 3, 95–106.Google Scholar
Haddad, EA and Teixeira, E (2015) Economic impacts of natural disasters in megacities: the case of floods in São Paulo, Brazil. Habitat International 45, 106–113.Google Scholar
Hallegatte, S (2009) Strategies to adapt to an uncertain climate change. Global Environmental Change 19, 240–247.Google Scholar
Hallegatte, S and Dumas, P (2009) Can natural disasters have positive consequences? Investigating the role of embodied technical change. Ecological Economics 68, 777–786.Google Scholar
Hallegatte, S, Hourcade, J-C and Dumas, P (2007) Why economic dynamics matter in assessing climate change damages: illustration on extreme events. Ecological Economics 62, 330–340.Google Scholar
Halliday, TJ (2012) Intra-household labor supply, migration, and subsistence constraints in a risky environment: evidence from rural El Salvador. European Economic Review 56, 1001–1019.Google Scholar
Holtz-Eakin, D, Newey, W and Rosen, HS (1988) Estimating vector autoregressions with panel data. Econometrica 56, 1371–1395.Google Scholar
Hsiang, SM and Jina, AS (2014) The causal effect of environmental catastrophe on long-run economic growth: evidence from 6,700 cyclones. NBER Working Paper Series No. 20352, National Bureau of Economic Research, Cambridge, MA.Google Scholar
Integrated Research on Disaster Risk (2014) Peril classification and hazard glossary. IRDR DATA Publication No. 1. Beijing: Integrated Research on Disaster Risk. Available at http://www.irdrinternational.org/2014/03/28/irdr-peril-classification-and-hazard-glossary/.Google Scholar
Islam, N (1995) Growth empirics: a panel data approach. Quarterly Journal of Economics 110, 1127–1170.Google Scholar
Jakobsen, KT (2012) In the eye of the storm – the welfare impacts of a hurricane. World Development 40, 2578–2589.Google Scholar
Kocornik-Mina, A, McDermott, T, Michaels, G and Rauch, F (2015) Flooded cities. CEP Working Paper No. 1398, London, UK.Google Scholar
La Porta, R and Shleifer, A (2014) Informality and development. Journal of Economic Perspectives 28, 109–126.Google Scholar
Lal, PN, Mitchell, T, Aldunce, P, Auld, H, Mechler, R, Miyan, A, Romano, LE and Zakaria, S (2012) National systems for managing the risks from climate extremes and disasters. In: Field, CB, Barros, V, Stocker, TF, Qin, D, Dokken, DJ, Ebi, KL, Mastrandrea, MD, Mach, KJ, Plattner, G-K, Allen, SK, Tignor, M, and Midgley, PM (eds.) Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation. A Special Report of Working Groups I and II of the Intergovernmental Panel on Climate Change (IPCC). Cambridge, UK, and New York, NY, USA: Cambridge University Press, Chapter 6, pp. 339–392.Google Scholar
Leitner, AM, Oberhofer, H and Raschky, PA (2009) Creative disasters? Flooding effects on capital, labour and productivity within European firms. Environment Resources Economics 43, 333–350.Google Scholar
Loayza, N, Olaberría, E, Rigolini, J and Christiaensen, L (2012) Natural disasters and growth: going beyond the averages. World Development 40, 1317–1336.Google Scholar
Lohmann, S and Lechtenfeld, T (2015) The effect of drought on health outcomes and health expenditures in rural Vietnam. World Development 72, 432–448.Google Scholar
Mankiw, NG, Romer, D and Weil, DN (1992) A contribution to the empirics of economic growth. The Quarterly Journal of Economics 107, 407–437.Google Scholar
Marengo, JA, Alves, LM, Alvala, RCS, Cunha, AP, Brito, S and Moraes, OLL (2017) Climatic characteristics of the 2010–2016 drought in the semiarid Northeast Brazil region. Annals of the Brazilian Academy of Sciences 90(2), Supplement 1. doi: 10.1590/0001-3765201720170206.Google Scholar
McDermott, TKJ, Barry, F and Tol, RSJ (2014) Disasters and development: natural disasters, credit constraints, and economic growth. Oxford Economic Papers 66, 750–773.Google Scholar
Medina, G, Almeida, C, Novaes, E, Godar, J and Pokorny, B (2015) Development conditions of family farming: lessons from Brazil. World Development 74, 386–396.Google Scholar
Ministério da Integração Nacional (2007) Manual para decretação de estado de emergência ou estado de calamidade pública. Available at http://www.mi.gov.br/c/document_library/get_file?uuid=aac1713a-727f-4275-be98-6e06abc775cc&groupId=10157 (in Portuguese).Google Scholar
Noy, I (2009) The macroeconomic consequences of disasters. Journal of Development Economics 88, 221–231.Google Scholar
Noy, I and Vu, TB (2010) The economics of natural disasters in a developing country: the case of Vietnam. Journal of Asian Economics 21, 345–354.Google Scholar
Raddatz, C (2007) Are external shocks responsible for the instability of output in low-income countries? Journal of Development Economics 84, 155–187.Google Scholar
Raddatz, C (2009) The wrath of God: macroeconomic costs of natural disasters. Available at http://siteresources.worldbank.org/DEC/Resources/Wrath_of_God_20080325_KCP.pdf.Google Scholar
Rasmussen, TN (2004) Macroeconomic implications of natural disasters in the Caribbean. IMF Working Paper No. 224, International Monetary Fund.Google Scholar
Ribeiro, FG, Stein, G, Carraro, A and Ramos, PL (2014) O impacto econômico dos desastres naturais: o caso das chuvas de 2008 em Santa Catarina. Planejamento e Políticas Públicas 43, 299–322 (in Portuguese).Google Scholar
Rodriguez-Oreggia, E, de la Fuente, A, de la Torre, R and Moreno, HAM (2012) Natural disasters, human development and poverty at the municipal level in Mexico. Journal of Development Studies 49, 442–455.Google Scholar
Roodman, D (2009) A note on the theme of too many instruments. Oxford Bulletin of Economics and Statistics 71, 135–158.Google Scholar
Rosales-Rueda, M (2016) Impact of early life shocks on human capital formation: evidence from El Niño floods in Ecuador. Available at http://sites.uci.edu/mrosales/files/2014/10/nino_paper_v22_ForEJ_long.pdf.Google Scholar
Seneviratne, SI, Nicholls, N, Easterling, D, Goodess, CM, Kanae, S, Kossin, J, Luo, Y, Marengo, J, McInnes, K, Rahimi, M, Reichstein, M, Sorteberg, A, Vera, C and Zhang, X (2012) Changes in climate extremes and their impacts on the natural physical environment. In Field, CB, Barros, V, Stocker, TF, Qin, D, Dokken, DJ, Ebi, KL, Mastrandrea, MD, Mach, KJ, Plattner, G-K, Allen, SK, Tignor, M, and Midgley, PM (eds.) Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation. A Special Report of Working Groups I and II of the Intergovernmental Panel on Climate Change (IPCC), chapter 3. Cambridge, UK: Cambridge University Press, pp. 109–230.Google Scholar
Silva, JGS (2014) Contribuições do programa Garantia-Safra para a reprodução de unidades produtivas familiares assentadas (Master's thesis). Universidade Federal do Ceará, Fortaleza, Ceará (in Portuguese).Google Scholar
Skidmore, M and Toya, H (2002) Do natural disasters promote long-run growth? Economic Enquiry 40, 664–687.Google Scholar
Stillwell, HD (1992) Natural hazards and disasters in Latin America. Natural Hazards 6, 131–159.Google Scholar
Strobl, E (2011) The economic growth impact of hurricanes: evidence from U.S. coastal counties. The Review of Economics and Statistics 93, 575–589.Google Scholar
Strobl, E (2012) The economic growth impact of natural disasters in developing countries: evidence from hurricane strikes in the Central American and Caribbean regions. Journal of Development Economics 97, 130–141.Google Scholar
Sun, L, Li, H, Ward, MN and Moncunill, DF (2006) Climate variability and corn yields in semiarid Ceará, Brazil. Journal of Applied Meteorology and Climatology 46, 226–240.Google Scholar
Torche, F (2011) The effect of maternal stress on birth outcomes: exploiting a natural experiment. Demography 48, 1473–1491.Google Scholar
Toya, H and Skidmore, M (2007) Economic development and the impacts of natural disasters. Economic Letters 94, 20–25.Google Scholar
United Nations (2012) Impacts of disasters since the 1992 Rio de Janeiro Earth Summit. The United Nations Office for Disaster Risk Reduction. Available at http://preventionweb.net/files/27162_infographic.pdf.Google Scholar
World Health Organization (2013) Emergency risk management for health: overview. World Health Organization, Public Health England and partners. Available at http://www.who.int/hac/techguidance/preparedness/risk_management_overview_17may2013.pdf.Google Scholar
Supplementary material: PDF

de Oliveira supplementary material

Online Appendix

Download de Oliveira supplementary material(PDF)
PDF 205.5 KB