Evaluating the effectiveness of emergency relief of the Central Emergency Response Fund after natural disasters
AbstractNatural disasters are increasingly common and emergency relief is often provided to help the affected countries recover. The United Nations started the Central Emergency Response Fund (CERF) in 2005 that allows for fast allocation of money to providers of humanitarian aid. This thesis evaluates this fund with respect to natural disasters, since its effectiveness can have implications for future emergency relief allocations. The following question is answered: To what extent can the grants provided by the Central Emergency Response Fund decrease the output growth volatility caused by natural disasters? A panel database is constructed and dynamic panel models are estimated by applying the Generalised Method of Moments. Results show that when CERF funding is provided after a natural disaster, the expected effect on output growth volatility of the natural disaster is neutralised and close to zero. This implies that CERF funding is effective, however, reports on the functioning of CERF report possible improvements concerning the allocation. Furthermore, alternative estimation methods might provide consistent results.
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