Assessment of the economic impact of investment in disaster risk reduction and prevention: The case of Tabasco

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This study assesses the role of the investments made in disaster risk reduction (DRR) and prevention in the actual reduction of the impact of floods in the state of Tabasco between 2007 and 2010. Based on a previous study conducted within the framework of the Technical Assistance Agreement between the Mexican Government and the World Bank, it was found that the intense rainfall events occurring in Tabasco in 2007 and 2010 were similar in terms of their hydrometeorological characteristics (rainfall) and spatial distribution (rainfall fields). When analyzing the accumulated rainfall recorded for both events, it was found that the magnitude of the 2010 floods was greater than that of the 2007 floods.

However, damages and losses estimations recorded by the National Center for Disaster Prevention (CENAPRED) show an 80 percent reduction in 2010, compared to 2007 (World Bank, 2014). The similarity between these two events provides an ideal “natural experiment” scenario to evaluate the benefits of the investments in DRR made between 2008 and 2010.

Motivated by the devastating floods that occurred in October 2007, the Mexican Federal Government, together with the Government of the State of Tabasco, designed the Comprehensive Water Plan of Tabasco (PHIT, Plan Hídrico Integral de Tabasco) and began its implementation. The aim of the PHIT was to come up with a set of solutions that guaranteed the population’s safety, as well as the performance and continuity of economic activities and the balance of ecosystems in the occurrence of floods. The PHIT provides for the implementation of structural measures (physical investments, such as embankments and reinforcements) and non-structural measures (non-engineering measures, such as workshops, trainings, development of early warning systems and drawing of risk maps, among others).

The aim of this analysis is to assess the impact caused by the floods and the investments in DRR on the socioeconomic wellbeing of the population of Tabasco. For that purpose, estimations were made of the impact on the school dropout rate for Basic Education students (primary and secondary levels), and of the effect onthe economic activity of the state (measured through changes in the intensity of nighttime lights [or NTL]). On the one hand, the results show that the fluvial flooding level (GLOFRIS) indeed has a negative effect on the level of school dropout and on the changes in NTL. On the other hand, no robust results were found for the effect of the investments in DRR, even after correctinga possible bias resulting from their location. conclusion, the results obtained in this studyreinforce those found in the previous one (World Bank, 2014): the impact of the 2007 floods was greater than that of the 2010 floods, even though the latter year was characterized by rainfall events of a greater magnitude.