Municipalities’ Budgetary Responses to Natural Disasters

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24 January 2025

The objective of this paper is to analyze the impact of natural disasters on municipalities’ budgetary choices, using an original database that allows us to study a sample including all French municipalities, 22,972 of which were affected by a natural disaster between 2000 and 2019. This exploratory analysis uses dynamic panel regression models to estimate municipal responses to natural disasters. We show that a shock causes an increase in spending for about 8 years, as well as an increase in revenue and debt up to 10 years after the disaster.