Assessing the Impact of Natural Disasters on Human Development Index in the Most Affected Countries

Abstract

Natural disasters has been identified as major threat to human development. This study attempts to identify the effect of disasters on Human Development Index (HDI). The sample consists of 30 countries from all over the world and data ranges from 1990 to 2015. The vulnerability index has been constructed where index varies across time for each of the countries. Disasters and their nature vary from country to country and this study focuses the climatic disaster in these countries. We estimate three Fixed Effects models using the Generalized Method of Moments. The results of the first model reveals that disaster related vulnerability negatively affects HDI. Second model results show that developing countries are more vulnerable than developed countries. Our third model assumes that developing countries with poor institutional capacity endure more corruption hence, we employed the interaction capturing vulnerability of developing countries and corruption therein. The interaction of corruption with developing countries’ vulnerability is found to appear significant and negatively affect HDI in our third model.