“Natural” disasters and regional governance: Evidence from European NUTS-3 regions

Abstract

“Natural” disasters" have negative consequences for the affected areas, including significant economic impacts. Using a sample of European NUTS-3 regions over the period 2003–17, this paper examines the impact of disasters on regional economic growth and the influence of the quality of regional governance on post-disaster economic recovery. We match disaster data from the EM-DAT database, EUROSTAT, US Geological Surveys and Global Archive of Large Floods. We find that the occurrence of a “natural” disaster leads to an annual decline in regional growth of about 0.28 percentage points. Furthermore, we find that both the impact on the economy and the duration of recovery are influenced by the quality of regional institutions.