The Determinants of Subnational Public Spending Allocation for Disaster Risk Reduction in Bangladesh

35 Pages Posted: 4 Feb 2020

See all articles by Azreen Karim

Azreen Karim

Bangladesh Institute of Development Studies (BIDS)

Ilan Noy

Victoria University of Wellington

Date Written: 2020

Abstract

We examine the directly observable determinants of sub-national (central to local) public spending allocations for disaster risk reduction and climate adaptation in Bangladesh, a country with a very high exposure to weather risk. We use a comprehensive dataset for the 483 sub-districts (Upazilas) in Bangladesh, tracking disaster risk reduction and adaptation funding provided to each sub-district by the central government during fiscal years' 2010-11 to 2013-14, disaggregated by the various types of social protection programs. We assess to what extent the primary determinants of such funding flows—such as current hazard risk, socio-economic vulnerability, and political economy considerations—contribute to these funding allocation decisions. We find that flood hazard risk and socio-economic vulnerability are both positively correlated with the sub-district fiscal allocations. We find that political factors do not seem to significantly correlate with these allocations and neither does proximity to the centres of Dhaka and Chittagong. Public spending for adaptive disaster risk reduction, as investigated here, can be a useful complementary intervention tool to other DRR programs, such as insurance or broader social transfers, provided that it is allocated rationally. Broadly, this appears to be the case in Bangladesh. We leave the measuring of the relative efficacy and efficiency of each financing tool for future work.

Keywords: subnational public spending, disasters, risk reduction, adaptation, Bangladesh

JEL Classification: Q540

Suggested Citation

Karim, Azreen and Noy, Ilan, The Determinants of Subnational Public Spending Allocation for Disaster Risk Reduction in Bangladesh (2020). CESifo Working Paper No. 8066, Available at SSRN: https://ssrn.com/abstract=3531433

Azreen Karim (Contact Author)

Bangladesh Institute of Development Studies (BIDS) ( email )

E-17, Agargao, Shere Bangla Nagar
Dhaka, 1207
Bangladesh

Ilan Noy

Victoria University of Wellington ( email )

P.O. Box 600
Wellington, 6140
New Zealand

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