Avoided Losses and the Development Dividend of Resilience

Abstract

Global economic losses from natural disasters continue to increase. And yet investments in disaster risk management (DRM) are not universal, as they are traditionally seen as being in competition with other development and economic priorities, and the multitude of benefits of DRM investments are not traditionally accounted for in cost-benefit analyses. This chapter contributes to this discussion by highlighting the multiple benefits of DRM investments, focusing on both the avoided losses when a disaster occurs but also the impacts on economic development even before a disaster strikes. The main message is that as well as reducing losses when a disaster strikes, DRM investments can generate a second 'development' dividend of resilience through a shift of investment strategies and perhaps even an increase in investment value that could benefit the economy even before a disaster strikes. Providing evidence about the existence of both these dividends to policy-makers and investors can contribute to a narrative reconciling short-and long-term objectives, thereby improving the acceptability and feasibility of DRM investments.