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CHAPTER 4

Prevention through Governments

ational, state, and local governments with the power to tax are responsible for many major prevention measures; but regardless of the political system, they

respond to the wishes of the people—at least some of them. People also act collectively through other entities, formal or ad hoc, many rooted in traditions: villages gathering to clean out the irrigation ditches for example. These organizations play an important though unheralded role in many economies: without them, governments are less effective. The chapter begins by discussing how much governments spend on prevention.

This requires a detailed grasp of budget accounting because prevention is not a specific budget item, and prevention is embedded in infrastructure investments, maintenance, and other spending. In four chosen countries, identified prevention spending was lower than post-disaster spending. But this does not necessarily imply it is “too little,” only that disasters increase spending on relief and that such expenditures remain high for several subsequent years, perhaps for good reasons. The effectiveness of prevention spending is more important than its magnitude, and some indicators can suggest the benefits of reversing the past neglect of maintenance and other types of preparedness spending. The chapter next examines who determines government spending. It is easy to

assert that politicians are shortsighted. But competition in the markets for votes, like other competitions, provides the public with the services they want—with a twist that arises when voters can observe inputs (building a levee), not outputs (protection from floods, also requiring other unobservable actions). So, even if voters want prevention, they could vote against such spending if they doubt that it would result in effective protection. The chapter then discusses how to improve collective decisions. Institutions and

political competition improve collective decision making, and against this backdrop, cost-benefit analysis is a useful guide to spend effectively. For disaster prevention in particular, ignoring the value of life tilts the balance against prevention; but using such values requires ethical considerations and a deeper appreciation of the tool. Cost- benefit analysis is a filter, not a scoop: it can rank alternatives, but the alternatives must be conceived by others. Last, it examines three items that have public-good characteristics related directly

to prevention. An early warning system is one such choice of great benefit to some

The, World Bank, Bank World, and Nations (UN) United. Natural Hazards, UnNatural Disasters, edited by World Bank The, et al., World Bank Publications, 2010. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/apus/detail.action?docID=606027. Created from apus on 2017-04-04 13:41:24.

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countries and in some places because warnings save lives and property. They are based on hazard warnings. All countries can benefit from modest but well-allocated spending on such systems and from sharing data among themselves. Critical infrastructure reduces the loss of life and property during and after a

disaster, and what is critical depends on the situation and the hazard. In Bangladesh, safe schools are important shelters during disasters. In Turkey, hospitals may be critical because earthquakes result in injuries. But critical is not a synonym for its importance in normal times, and the choice requires informed judgment. For environmental buffers, it is cheaper to protect than to restore them.

Development, including sustainable development, involves change, and choosing what to protect requires a broader understanding of the forces of nature and their effects. Much of the cost-benefit analysis in this area is flawed, and careful analysis is difficult, but important.

How much do governments spend? Governments do not routinely collect or monitor spending on disaster prevention. Budgets are often allocated by ministries, but even if a “Ministry of Disaster Prevention” existed, it would have little to do. Most preventive measures are embedded in the design and construction of infrastructure (such as the location and height of a dam) or in other spending (such as school buildings that serve as shelters). So, measuring prevention spending requires much effort and considerable judgment to identify spending categories across sectors and levels of government and to collect budgeted amounts. This was attempted for this report in Colombia, Indonesia, Mexico, and Nepal. Local consultants drew on their own knowledge and that of the governments’

disaster management organizations using a common template to separate spending on prevention and relief. Pre-disaster spending includes expenditures on identifying risks (risk mapping and hazard assessments), risk reduction (physical/structural works to withstand damage), risk transfer (insurance), and disaster preparedness (early warning systems and public training and awareness about risks and prevention). Post-disaster spending includes expenditures on emergency response (search and rescue operations, relief), rehabilitation, and reconstruction (repairing and reconstructing houses, commercial establishments, and public buildings). Except in Colombia, pre-disaster spending was generally lower than post-, spending on relief fluctuates far more than on prevention, and relief expenditures rise after a disaster and remain higher than prevention spending for several subsequent years (de la Fuente 2009) (figure 4.1). For instance, Mexico’s relief spending rose after the 2005 hurricanes and the 2007 floods (in the southeastern state of Tabasco) and remained three times higher than prevention spending from 1998 to 2008.

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Figure 4.1 Post-disaster spending fluctuates more than pre-disaster spending

Source: de la Fuente 2009.

Though one cannot conclude from this alone that prevention is “too little” (or that relief is “too much”), this exercise is the first step in systematically estimating how much is spent on pre- and post-disaster management. If and when data are available, these estimates can be further refined by:

Tracking expenditures at subnational levels. With decentralization in many countries, many prevention measures are now undertaken at subnational levels, as in Turkey, where the disaster risk management cycle was highly centralized but is now being decentralized (see Spotlight 2). Accounting for measures indirectly related to prevention. For example, any anti-poverty policy or program, which, even though not disaster specific, reduces vulnerability or exposure. Accounting for those post-disaster expenditures where the reconstruction of buildings and infrastructure includes disaster-resistant measures that lead to future prevention. Doing so would provide a basis for tracking global expenditures on prevention and for related policy implications in hazard- specific and geographically specific contexts. But the data constraints and

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resource requirements for doing so should not be underestimated.

What, then, of allocation and effectiveness of spending? Too little goes for intangibles and maintenance. Effective spending has high rates of return but is difficult in practice. A cost-benefit analysis is a useful ex ante guide, and ex post evaluation ensures that lessons are learned. But rarely is either used. So we grope for indicators that seem reasonable (but will not persuade a skeptic that much spending is poorly allocated and ineffective). For example, infrastructure built appropriately to reduce disaster risk may not be

sufficiently maintained, lowering the effectiveness of the original capital spending. About 30 percent of infrastructure assets of a typical African country need rehabilitation (figure 4.2), and just $0.6 billion on road maintenance would yield $2.6 billion in annual benefits (BriceñGarmendia, Smits, and Foster 2008). Government neglect of maintenance is similar to neglecting spending on other

intangible items that yield future benefits, such as environmental protection and education (World Bank 2000; López and Toman 2006). Per capita spending, except for rapidly growing Ireland and the Republic of Korea, is greater for physical capital than for intangibles, which also have high rates of return (figure 4.3).1

Figure 4.2 Underspending on maintenance implies an enormous infrastructure rehabilitation backlog in Sub-Saharan Africa

Note: The rehabilitation index shows the average percentage across countries of each type of infrastructure that is in poor condition and thus in need of rehabilitation. Source: BriceñGarmendia, Smits, and Foster 2008.

Figure 4.3 Per capita spending is greater for physical capital

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