Skip to main content
We are sorry but the page you are looking for is not available in the language you have selected, please go to the corresponding homepage
  1. Home
  2. Library

Enterprise Recovery Following Natural Disasters

2010 — By Suresh de Mel, David McKenzie, Christopher Woodruff

Using data from surveys of enterprises in Sri Lanka after the December 2004  tsunami, the authors undertake a microeconomic study of the recovery of the private firms in a developing country following a major natural disaster.

Disaster recovery in low-income countries is characterized by the prevalence of relief aid rather than of insurance payments; the data show this distinction has important consequences. The data indicate that aid provided directly to households correlates reasonably well with reported losses of household assets, but is uncorrelated with reported losses of business assets.

Business recovery is found to be slower than commonly assumed, with disaster-affected enterprises lagging behind unaffected comparable firms more than three years after the disaster. Using data from random cash grants provided by the project, the paper shows that direct aid is more important in the recovery of enterprises operating in the retail sector than for those operating in the manufacturing  and service sectors.