Five years of regional risk pooling: An updated cost-benefit analysis of the African risk capacity
An initial cost-benefit analysis (CBA) of the African Risk Capacity (ARC), published in 2013, showed that regional risk pooling for severe droughts could increase benefits to poor households by as much as US$ 1.90 per dollar invested, due to the speed, cost and targeting gains from improved risk fin...
| Main Authors: | , , |
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| Format: | Artículo preliminar |
| Language: | Inglés |
| Published: |
International Food Policy Research Institute
2020
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/143550 |
| _version_ | 1855522950765084672 |
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| author | Kramer, Berber Rusconi, Rob Glauber, Joseph W. |
| author_browse | Glauber, Joseph W. Kramer, Berber Rusconi, Rob |
| author_facet | Kramer, Berber Rusconi, Rob Glauber, Joseph W. |
| author_sort | Kramer, Berber |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | An initial cost-benefit analysis (CBA) of the African Risk Capacity (ARC), published in 2013, showed that regional risk pooling for severe droughts could increase benefits to poor households by as much as US$ 1.90 per dollar invested, due to the speed, cost and targeting gains from improved risk financing and contingency planning of a humanitarian response. We revisit the assumptions underpinning this initial CBA to reflect current ARC operations, and we update the CBA using new methods for evaluating the costs and benefits of regional risk pooling to finance disaster risk management. Under the revised methods and assumptions, the increase in benefits to the poor will have exceeded the costs of regional risk pooling, but not by as much as US$ 1.90 per dollar invested. This is because ARC premiums have been higher than assumed in the initial CBA, and insured countries have used ARC payouts mainly to distribute food aid, instead of leveraging state-contingent welfare schemes with potentially larger speed, cost and targeting gains. We discuss potential ways to lower premiums and strengthen the benefits to poor households, highlighting also the potential to realize welfare gains from improved risk management and investments ex ante, even during years without insurance payout. |
| format | Artículo preliminar |
| id | CGSpace143550 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2020 |
| publishDateRange | 2020 |
| publishDateSort | 2020 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1435502025-12-02T21:02:52Z Five years of regional risk pooling: An updated cost-benefit analysis of the African risk capacity Kramer, Berber Rusconi, Rob Glauber, Joseph W. mitigation investment cost benefit analysis capacity development disaster risk reduction disaster risk management drought risk transfer An initial cost-benefit analysis (CBA) of the African Risk Capacity (ARC), published in 2013, showed that regional risk pooling for severe droughts could increase benefits to poor households by as much as US$ 1.90 per dollar invested, due to the speed, cost and targeting gains from improved risk financing and contingency planning of a humanitarian response. We revisit the assumptions underpinning this initial CBA to reflect current ARC operations, and we update the CBA using new methods for evaluating the costs and benefits of regional risk pooling to finance disaster risk management. Under the revised methods and assumptions, the increase in benefits to the poor will have exceeded the costs of regional risk pooling, but not by as much as US$ 1.90 per dollar invested. This is because ARC premiums have been higher than assumed in the initial CBA, and insured countries have used ARC payouts mainly to distribute food aid, instead of leveraging state-contingent welfare schemes with potentially larger speed, cost and targeting gains. We discuss potential ways to lower premiums and strengthen the benefits to poor households, highlighting also the potential to realize welfare gains from improved risk management and investments ex ante, even during years without insurance payout. 2020-10-01 2024-05-22T12:15:01Z 2024-05-22T12:15:01Z Working Paper https://hdl.handle.net/10568/143550 en https://hdl.handle.net/10568/106171 https://hdl.handle.net/10568/153604 https://doi.org/10.2499/9780896292949_06 https://doi.org/10.1088/1748-9326/ab5ebb https://doi.org/10.1016/j.deveng.2019.100042 Open Access application/pdf International Food Policy Research Institute Kramer, Berber; Rusconi, Rob; and Glauber, Joseph W. 2020. Five years of regional risk pooling: An updated cost-benefit analysis of the African risk capacity. IFPRI Discussion Paper 1965. Washington, DC: International Food Policy Research Institute (IFPRI). https://doi.org/10.2499/p15738coll2.134046. |
| spellingShingle | mitigation investment cost benefit analysis capacity development disaster risk reduction disaster risk management drought risk transfer Kramer, Berber Rusconi, Rob Glauber, Joseph W. Five years of regional risk pooling: An updated cost-benefit analysis of the African risk capacity |
| title | Five years of regional risk pooling: An updated cost-benefit analysis of the African risk capacity |
| title_full | Five years of regional risk pooling: An updated cost-benefit analysis of the African risk capacity |
| title_fullStr | Five years of regional risk pooling: An updated cost-benefit analysis of the African risk capacity |
| title_full_unstemmed | Five years of regional risk pooling: An updated cost-benefit analysis of the African risk capacity |
| title_short | Five years of regional risk pooling: An updated cost-benefit analysis of the African risk capacity |
| title_sort | five years of regional risk pooling an updated cost benefit analysis of the african risk capacity |
| topic | mitigation investment cost benefit analysis capacity development disaster risk reduction disaster risk management drought risk transfer |
| url | https://hdl.handle.net/10568/143550 |
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