Natural Disasters and Economic Development: Some Data

by Don Boudreaux on January 15, 2010

in Cleaned by Capitalism,Complexity and Emergence,Current Affairs,Data,Risk and Safety,Standard of Living

Here’s a letter that I sent this morning to the New York Times:

About the Haitian earthquake, David Brooks says that “This is not a natural disaster story.  This is a poverty story” (“The Underlying Tragedy,” Jan. 15).

Empirical research reveals that Mr. Brooks is correct.  For example, in a 2005 paper, economist Matthew Kahn (now teaching at UCLA) found that, while rich countries experience just as many natural disasters as do poor countries, persons in rich countries are less likely than are persons in poor countries to die from such disasters.  Specifically, a country of 100 million people with a per-capita income of $8,000 will experience about 530 fewer deaths from natural disasters each year than will a country with the same population but where per-capita income is only $2,000.  Raise the per-capita income from $8,000 to $14,000 and the annual expected death toll from natural disasters falls by another 233 persons.

Sincerely,
Donald J. Boudreaux

Kahn blogs at Environment and Urban Economics.  You can find the paper mentioned above in this post of his; it’s “paper #1.”

FYI, Haiti’s annual per-capita income is about $1,300 (in 2008 dollars).  Annual per-capita income in the Dominican Republic is about $8,200.  It’s likely that, had the quake struck Santo Domingo rather than Port-au-Prince, the population-adjusted death toll would have been lower.

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  • Agreed on this issue. The thing is, the First World doesn't get this. The reaction to high death tolls due to natural disasters is typically reactive instead of preventative. Which is a real pity, as with some money and know how, countries could be developed starting with an educated population that could secure areas from natural disasters, for example, building safer buildings. Case in point, most concrete buildings in Haiti don't have steel bars and posts inside to support a wall, making it very vulnerable to quakes and even storms. Developmental aid, not disaster aid, is the real answer. Perhaps it might also be feasible to offer scholarship opportunities or even primary education overseas for poor children?
  • Hank Rearden
    Great, so now the libtards will take this data and say that the easy fix is to mandate minimum wage to the tune of $8200 annually, and we'll probably be stuck pumping up their economy to support it. These kind of stats are very informative, but the average person will misinterpret them.
  • fredfoldvary
    See "How San Francisco Recovered from its Earthquake—Without Federal and State Aid" http://ca.lp.org/lp20060425.shtml
  • fredfoldvary
    See http://ca.lp.org/lp20060425.shtml
    "How San Francisco Recovered from its Earthquake—Without Federal and State Aid"
  • Mommsen1625
    I am very familiar with Haiti's history in the 19th century. Much of its problems can be traced to that period when successive governments - which arouse via coups and civil wars (at one point Haiti broke up into two nation states) - embarked on a number of very dumb policies - a lot of them associated with land redistribution. Some of its problems can also be traced to its foreign policy decisions; its efforts to foment revolution throughout the Caribbean and Latin America (many forget that without Haiti Bolivar's revolution would have probably collapsed or at the very least taken far longer) were rather costly both in blood and treasure and in trade relations.
  • More than 200,000 people on earth die EACH DAY (from all causes). In a country of 100,000 million, a few thousand people will die EACH DAY.

    Worrying about a YEARLY change of a few hundred deaths is focusing on the wrong issue, in my opinion. I don't like the existence of poverty either, but let's not get distracted about the many much more serious negative impacts of poverty.
  • Gil
    In a country of 100 billion? LOL!
  • Where did you get 100 billion from?
  • Gil
    "In a country of 100,000 million . . ."

    X)
  • Given that, why hasn't Haiti long-ago just alleviated their poverty problem by implementing a much higher minimum wage?
  • muirgeo
    They don't have a minimum wage and we do. So yeah maybe that'd be a good place to start.
  • Mommsen1625
    There was no minimum wage in 1906 when San Francisco experienced its earthquake; yet SF recovered rather rapidly.

    BTW, Haiti does have a minimum wage; that sound is your entire argument being blown apart.
  • David Shaw
    I assume you're joking in which case- A hearty LOL!
  • David, yes, I was joking. Couldn't help myself. ;-)
  • muirgeo
    All the end result of Neoliberalism.

    In Haiti most recently (Reagan era) they decided Haiti's future lie in assembly manufacturing. Needing a captive labor force policies were enacted to depopulate the countryside. They pushed to take down Haities tariff system on rice allowing American rice to flood the market and bankrupt the Haitian rice farmers. They populated the cities and manufacturing failed. Ultimately these rice farmers became the owners of shanties and the bodies beneath the rubble.

    BS when some one says capitalism doesn't force people into situations. The wealthy and powerful produced from capitalistic systems will always exploit the existing government to their own benefit and to the detriment of many. Its a system just as harsh as communism and is only kept in some reasonable control by what is left of our democratic institutions.

    HAITI IS CAPITALISM
  • vidyohs
    Communism/socialism is the only system in the world that will make comrades long for the days of out right slavery.

    See the history of the Soviet Union and of Red China.
  • Haiti ranks 147 out of 179 on the Free Trade rankings. I think that you need to check your assumptions... http://online.wsj.com/article/SB123180425194675...
  • JohnK
    >>All the end result of Neoliberalism.

    California?
  • sandre
    Wonderful point muir. Haiti was a socialist paradise before 1986 with giant hearted Duvalier in power since 1957. That aside, don't tell anybody that you got the dates wrong. It was in the 1970s that the central planners in the United States tried to perfect the existing paradise. Of course, capitalist bleeding hearts of that time, the Al Gores, George Soros of that time had a hand in those plans.

    Love you, mmmmmwwwwwaaaaahhhhh
  • indianajim
    Great letter, great point; I plan to bring it to the attention of my beginning econ students at 1:00 today.
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