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dc.titleThe Dual Return, Humanitarian and Fiscal, of Investing in Anticipatory Action
dc.contributor.authorMatta, Prabhmeet Kaur
dc.contributor.authorZizzamia, Rocco Marco Antonio
dc.contributor.authorAndreé, Jasper
dc.contributor.authorPersaud, Avinash Divakar
dc.contributor.authorAlmeida, Juliana
dc.contributor.authorChaves-Gonzalez, Juan
dc.contributor.authorAlemaye, Billie Getachew
dc.contributor.authorPaulose, Hanna
dc.contributor.orgunitDisaster Risk Management Unit
dc.coverageLatin America
dc.coverageThe Caribbean
dc.date.available2026-11-09T00:11:00
dc.date.issue2026-11-09T00:11:00
dc.description.abstractDroughts, floods, and storms are increasingly forecastable days or weeks in advance, yet governments across Latin America and the Caribbean continue to finance them as fiscal surprises. Post-disaster response is costly in three compounding ways: emergency procurement carries a 30 to 50 percent scarcity premium, output and tax revenue contract by 1 to 2 percent, and the resulting gap is closed through expensive borrowing or cuts to health, education, and infrastructure, raising debt service by roughly 2.5 percentage points of GDP. The humanitarian returns of anticipatory action are well established; whether it also protects public budgets has not been. This report develops a deliberately conservative fiscal model, counting only direct emergency spending the government would otherwise incur, and applies it to eleven country-hazard cases. In Honduras, the only case with country-specific data for every parameter, an anticipatory drought programme costing 8 million dollars per year yields a benefit-cost ratio of 1.69 when financing frictions are included and 1.21 on direct costs alone, breaking even if it avoids just 12 percent of emergency spending. Returns are strongest for droughts, where most spending is avoidable, and weaker for floods and storms, where reconstruction dominates. A forty-year simulation shows that a government investing about 0.8 percent of GDP annually in anticipatory action sustains GDP roughly 24 percent higher and a lower debt ratio than one that only reacts. Data gaps limit precision but not direction. The report proposes eight reforms for governments, multilateral development banks, and humanitarian agencies to reframe anticipatory action as a fiscal investment with a dual return.
dc.format.extent86
dc.identifier.doihttp://dx.doi.org/10.18235/0014594
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/The-Dual-Return-Humanitarian-and-Fiscal-of-Investing-in-Anticipatory-Action.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectFiscal Policy
dc.subjectDisaster
dc.subjectFinance
dc.subjectEmergency Management
dc.subjectDrought
dc.subjectFlood Damage
dc.subjectCapital Formation
dc.subjectProcurement
dc.subjectGross Domestic Product
dc.subject.jelcodeO54 - Latin America • Caribbean
dc.subject.jelcodeQ54 - Climate • Natural Disasters and Their Management • Global Warming
dc.subject.jelcodeQ58 - Government Policy
dc.subject.jelcodeG15 - International Financial Markets
dc.subject.jelcodeH63 - Debt • Debt Management • Sovereign Debt
dc.typeTechnical Notes
idb.identifier.pubnumberIDB-TN-03418
idb.operationRG-T4956
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