
27/06/2025
🌍This week, we would like to highlight a new World Bank Policy Research Working Paper: Global Socio-economic Resilience to Natural Disasters. Published in May 2025, this global study estimates the well-being losses and recovery times resulting from natural disasters in 132 countries—shifting the focus from asset losses alone to a more people-centred understanding of disaster impacts. The findings highlight that each dollar lost in physical assets translates, on average, into well-being losses equivalent to a $2 drop in national consumption, with the poorest bearing the heaviest burden. The poorest income quintile within each country incurs only 9% of national asset losses but accounts for 33% of well-being losses.
📊At the heart of this work is a global microsimulation model that estimates disaster impacts on representative households across income groups. The model captures how losses in income and assets affect consumption and uses an economic utility framework to translate these shocks into well-being impacts.
📝 This study evaluates ten policy options and concludes that socio-economic and financial strategies—such as insurance schemes and social protection—can serve as effective complements to asset-based approaches like improved construction standards. It also finds that interventions aimed at low-income groups tend to deliver greater returns by reducing well-being losses more efficiently per dollar spent.
📉 On a similar note, the Development Analytics team has modelled and estimated the impact of shocks ranging from disasters such as earthquakes and floods to the COVID-19 pandemic for countries including Türkiye, Azerbaijan, Bosnia and Herzegovina, Tajikistan, Georgia, and St Lucia. Following the estimation of the shock’s impact, we further simulate the poverty-mitigating potential of different cash transfer schemes responding to the shocks. By doing this, we support policymakers with an evidence base for fine-tuning social protection interventions, ensuring that they are both responsive and adaptive to the evolving needs of the affected communities. We also utilise our interactive web application, the Interactive Social Policy Simulator (ISPS) to showcase these results in an interactive and flexible way.
🔗To read the World Bank working paper: https://openknowledge.worldbank.org/entities/publication/ed72d459-6715-435a-ad06-7a3ddc5ff23c
🔗To learn more about our work on Design of Shock-Responsive Social Protection Programmes:
https://www.developmentanalytics.org/design-of-shock-responsive-social-protection-programmes
🔗To learn more about the Interactive Social Policy Simulator: https://www.developmentanalytics.org/interactive-social-policy-simulator