DISASTER RISK FINANCE
AS A TOOL FOR DEVELOPMENT

Extreme natural events such as droughts, floods, earthquakes, tropical cyclones, and pandemics can threaten lives, livelihoods, and even entire economies. Disaster risk finance aims to increase the resilience of vulnerable countries to the financial impact of disasters as part of a comprehensive approach to disaster risk management. By increasing resilience, disaster risk finance offers the promise of protecting and promoting development. But does it actually work in practice?

Critics of disaster risk finance often argue that investing to avoid or reduce risk is more cost-effective than investing in post-disaster expenditures. They also argue that insurance and other risk transfer instruments can be opaque and expensive, providing poor value to governments.

Generating the evidence to better-guide investments in sovereign disaster risk finance programs, to maximize their expected humanitarian and development impacts and to ensure that public investments deliver value for money, requires robust methodologies—ones that rigorously monitor and evaluate existing schemes and new products.

This website summarizes the key messages of a book, a technical report, and 14 research papers, categorized into four themes.