Funding Flows: Transboundary Considerations of Disaster Recovery

Abstract

Scholars agree that the impact of a disaster in a globalized world increasingly extends beyond political and geographical boundaries, creating transboundary disaster events. Though not all disasters fit the description of a transboundary event, many embody transboundary characteristics. For instance, national and transnational financing and other resources directed toward postdisaster humanitarian relief and long-term reconstruction efforts can also create transboundary flows that cross political and geographical lines. Rebuilding after physical damage and economic losses during a disaster, the impacts of which are disproportionately higher in the poorest countries, is a costly endeavor that requires multiple sources of finance. Depending on the scale and visibility of the disaster and local capacities, financial arrangements, resources, and assistance can come from a variety of sources including the government, international institutions, and private-sector, and nongovernmental, and civil society organizations. In particular, transnational financing from bilateral donors and international financial institutions, which constitute multilateral and bilateral streams of financing for postdisaster recovery, comprise a significant percentage of recovery funding globally. Such flows, although inherently transboundary, are not well understood as a phenomenon within the transboundary disasters literature. Three major types of agencies provide funding for postdisaster reconstruction including multilateral development banks (MDBs), also referred to as international financial institutions (IFIs); bilateral development agencies within donor countries; and United Nations (UN) development agencies. MDBs such as the World Bank are created by a group of countries that utilizes pooled contributions from national governments and additional resources, such as interest collected from loans, to finance development projects. Bilateral development agencies such as the United States Agency for International Development are institutions established by individual countries to provide development funding to nation-states; they work closely with IFIs. Numerous questions about transnational financing for postdisaster recovery as an important component of the transboundary disaster literature remain unanswered and need further insights. What are the links among transnational stakeholders (i.e., MDBs, bilateral donors, UN agencies, and international nongovernmental organizations) and transboundary financial arrangements for postdisaster recovery? What are the aggregate impacts of transboundary financing on postdisaster reconstruction? How do transboundary financing flows occur among bilateral donors, MDBs, and local and international nongovernmental organizations? Where can scholars find data sets on postdisaster transnational financing? How does transboundary financing impact postdisaster recovery governance in recipient countries? The current state of knowledge on transboundary financing of postdisaster recovery provides some guidance on best practices and the challenges with coordinating and monitoring.