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Natural disasters are an important source of vulnerability in the Caribbean region. Despite being one of the more disaster-prone areas of the world, it has the lowest levels of insurance coverage. This paper examines the vulnerability of Belize’s public finance to the occurrence of hurricanes and the potential impact of insurance instruments in reducing that vulnerability. The paper finds that catastrophic risk insurance significantly improves Belize’s debt sustainability. In addition, the methodology employed makes it possible to estimate the appropriate level of insurance, which for the case of Belize is a maximum coverage of US$120 million per year. International organizations can play a role in assisting countries to overcome distortions in insurance markets, as well as in helping to relax internal political resistance to the purchase of insurance policies.
This paper applies an analytical framework that identifies the types of market failures responsible for the underdevelopment of the housing finance system. The working hypothesis is that there is a correlation between the nature and scope of market failures, and the kind of public interventions actually implemented. Evidence seems to disprove the policy adequacy hypothesis. Nevertheless, it is enc ... (View publication)
Insurance can potentially play an important role in climate change adaptation for rural households in developing countries as part of the overall climate change adaptation strategy. However, agricultural insurance markets have many market failures that inhibit their full development. In Colombia these market failures, namely information asymmetries and high transaction costs, are amplified by ... (View publication)
This study examines potential policy instruments for agricultural climate change adaptation based on empirical analysis of a theoretical model for Brazil. Risk management approaches, such as agricultural insurance and research and development investments in technological change, particularly call for analysis. The results for a weather index effect on loss of profits and amount of insurance i ... (View publication)
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