Economic Considerations in Designing Emergency Management Institutions and Policies for Transboundary Disasters

Abstract

An increasing number of disasters are generating consequences that extend beyond political boundaries. This article provides an economic framework for designing transboundary emergency management institutions and policies to address these transboundary crises. It emphasizes the importance of economic considerations in two ways. First, we disaggregate economic losses into direct and indirect components, which vary in terms of their transboundary potential. Second, we apply economic principles such as scale economies, externalities and public goods in analysing European cooperation in emergency management. The article concludes by identifying the type of consequences that might best be addressed by a wider geographic and political authority.