Enhancing efficiency in humanitarian action through reducing risk - A study on cost-benefit of disaster risk reduction

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The objective of this study is to provide a robust empirical basis to decision makers, donors, and other stakeholders about the cost-effectiveness of disaster risk reduction measures. It is commonly accepted that disaster risk reduction measures can be effective in reducing risks. However, investments in disaster risk reduction are globally very low. To this end, the study assessed a total of 157 existing case studies of disaster risk reduction measures to draw general conclusions. Given the challenges mentioned above (context-specific analysis, scattered information, low methodological quality) the study developed a methodological framework which allowed the study team to “dissect” the existing case studies and make them – to the extent possible – comparable.

The study concludes that there is strong evidence that disaster risk reduction in general pays off – i.e. that the socio-economic benefits of such interventions are in general higher than the costs. From a total of 157 case studies, 139 report benefit-cost-ratios above, meaning that the benefits outweigh the costs. This suggests that there are strong indications that in the vast majority of cases – beyond the obvious benefits of avoiding casualties, suffering and economic loss – disaster risk reduction is a cost-effective way of managing disaster risk. This is substantiated by the fact that often a large range of benefits is not included in the benefit-cost calculations due to methodological challenges while costs are usually fully accounted for