Financial Crises and Economic Resilience: Lessons for Disaster Risk Management and Resilience Dividends
The development progress achieved by many countries, and particularly by low-income countries, is at risk of being undermined or even wiped out by the range of shocks and resulting crises they face. Since the turn of the millennium, there has been growing
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Financial Crises and Economic Resilience: Lessons for Disaster Risk Management and Resilience Dividends Stephany Griffith-Jones and Thomas Tanner
Abstract The development progress achieved by many countries, and particularly by low-income countries, is at risk of being undermined or even wiped out by the range of shocks and resulting crises they face. Since the turn of the millennium, there has been growing recognition of the importance of climate and disaster risks for development progress; the global financial crisis of 2007/08 also had profound implications for economies around the world. Partly in response to this experience, anticipatory risk management systems have become an increasingly popular approach to tackling both economic and disaster resilience. This chapter examines the impacts of financial crises on development at the national level and the responses of major international institutions in terms of coping with and anticipating such shocks. It then examines the lessons from these risk management mechanisms for understanding and recognising the dividends of resilience emerging from disaster risk management. Keywords Disaster risk
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Financial crisis Economic resilience Co-benefits
Introduction
The development progress achieved by many countries, and particularly by low-income countries (LICs), is at risk of being undermined or even wiped out by the range of shocks and resulting crises they face. Since the turn of the millennium, Many thanks to Swenja Surminski, Mook Bangalore and anonymous reviewers for insightful comments and inputs. S. Griffith-Jones (&) Columbia University, New York, USA e-mail: [email protected] T. Tanner Overseas Development Institute, London, UK e-mail: [email protected] © Springer International Publishing Switzerland 2016 S. Surminski and T. Tanner (eds.), Realising the ‘Triple Dividend of Resilience’, Climate Risk Management, Policy and Governance, DOI 10.1007/978-3-319-40694-7_7
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S. Griffith-Jones and T. Tanner
there has been growing recognition of the importance of climate and disaster risks for development progress. The global financial crisis of 2007/08 also had profound implications for economies around the world (Benson and Clay 2003; Te Velde et al. 2011). In response, anticipatory risk management systems have become an increasingly popular approach to tackling both economic and disaster resilience. This chapter examines the impacts and costs of financial crises on development at the national level and the responses of major international institutions in terms of coping with and anticipating such shocks. It then explores the lessons from these financial risk management mechanisms for promoting investment in resilience by emphasising the co-benefits of investment that can be realised even in the absence of future shocks. Crucially, while there has been a more concerted effort and investment to tackle uncertainty and damage caused by financial crises, as well as shocks through trade channels, investment and progress in disaster risk management (DRM) has
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