How can we make Disasters Dull? Book review

Oxfam Senior Humanitarian Policy Adviser Debbie Hillier can barely contain her excitement – today is International Daydebbiehillier for Disaster Reduction. To celebrate, she reviews a new book on the issue

While policy frameworks on Disaster Risk Reduction have proliferated – the SDGs, the Paris Agreement, the Sendai Framework – the practicality remains elusive.

This is the issue addressed by Dull Disasters? How Planning ahead will make a difference, by Daniel J Clarke and Stefan Dercon.  Its simple thesis is that governments need to plan for disasters before they happen.  Their plans must spell out what the risks are; in insurance-speak, this is called working out your contingent liabilities. The plan must also define who is going to pay for and be responsible for the response, the clean-up.

The book explains very well that if there is no plan, then the response is fragmented and inefficient and there are serious disincentives for people to prepare properly for disasters.  Why should local governments/national governments/farmers invest and work hard to reduce their risk, if they may get bailed out by others in the event of a crisis?

dull-disasters-coverThe plan must be rules-based, ideally with automatic triggers leading to action, and hence not open to political manipulation.  And the plan must be prefinanced.  The book rails against ‘begging-bowl financing’: “This ad-hoc post disaster model for financing disasters is hardly worthy of the twenty-first century. In fact, it feels distinctly medieval.” I couldn’t agree more. Why would a local or national government take time and care to prepare a serious disaster plan if it is not clear whether there will be any funding for it?

What is striking is how few examples of this there actually are.  The book keeps coming back to two which are surely ripe for imitation.

  • Mexico’s Natural Disaster Fund, FONDEN, which finances ‘build back better’ reconstruction costs of state infrastructure; this is funded by an annual budget allocation and reinsurance and a ‘catastrophe bond’ for the really big disasters.
  • Kenya’s Hunger Safety Net Programme, one of my personal favourites, which was specifically designed to scale up. It provides regular cash transfers for poor pastoralists in northern Kenya, and then quickly and efficiently provides cash to extra households in times of drought – there is really useful learning on this. In vulnerable countries, developing programmes – health, social protection, nutrition – that can scale up and down in response to the changing context is surely a big part of the answer.

Insurance is mentioned quite a lot in the book, but the jury is out on its effectiveness.  One fact that struck me was that over the last decade, donors have supported over 100 pilot micro-insurance programmes for farmers – yet all have failed without subsidies.  And whilst government-level insurance has a role to play, this seems to me to be far from any kind of gamechanger – even if the African Risk Capacity scheme had paid out in response to Malawi’s drought this year (which it didn’t, to much surprise and embarrassment), its maximum payout would have been $30m, whereas actual needs are $395m.

This book is certainly timely – disaster losses average $250-$300bn a year, with untold human suffering. It is table-of-risk-financing-instrumentsprobably best suited to those already in the sector – perhaps government officials who need to implement those policy commitments – as it feels a bit like a text book. More real examples – successful or otherwise – would have made it more interesting and powerful.

The book is right of course that planning ahead for disasters is crucial. Whilst being exhorted to think like an insurance company doesn’t really work as motivation for me, I hope it does work for governments. It also fits into the current narrative around ‘local humanitarian leadership’ which was a big takeaway from the World Humanitarian Summit in May. Instead of the international system riding in on its metaphorical white charger, local actors (both government and civil society) should be empowered and supported to lead a response that is explicitly driven by local needs and realities.  This book shows that a government that wants to lead a disaster response well, needs to have done its homework first.

A PDF of the book is free to download

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Comments

One Response to “How can we make Disasters Dull? Book review”
  1. Duncan

    I think you understate the rampant ineffectiveness of the humanitarian system, and the opportunities for reform that are offered by insurance-like principles (not necessarily insurance contracts).

    Humanitarian aid is not just too little too late: it is too slow, badly allocated, too unpredictable, provided in a form that suits the donor not the recipient, too bureaucratic. As you rightly say in your book review, there is no incentive to invest in risk reduction or preparedness.

    Operating along the lines of insurance would tackle many of these shortcomings: it would enable governments (not well-meaning donors) to respond more quickly, more flexibly, more appropriately, and more reliably. And governments could bring down the premiums by investing in risk reduction and preparedness, with benefits for everyone.

    Stefan Dercon and I are co-chairing a working group looking at how these principles could be more widely adopted in the humanitarian system, with the brilliant support of Theo Talbot and a fantastic inter-disciplinary group of experts. You can read all about it here:
    http://www.cgdev.org/working-group/payouts-for-perils

    We’d welcome feedback on these ideas.

    Owen

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