Incentives for mitigation investment and more effective risk management: the need for public-private partnerships

A key question facing both well-developed industrial countries and emerging economies is how to reduce future disaster losses while still providing fi nancial protection to victims from these events. This paper proposes a stra tegy for the use of cost-effective risk mitigation measures coupled with in surance and/or new capital market instruments to achieve these objectives. The mix of these measures will depend on the governance structure and the i nstitutional arrangements in the particular country. There will always be a need for a combination of policy tools and the interaction among key inter ested parties from both the private and public sectors in developing a disa ster management strategy. Two examples, one from US and the other from Hond uras, illustrate differences between strategies that countries can adopt. ( C) 2001 Elsevier Science B.V. All rights reserved.