Japan’s Disaster Risk Financing: Framework and Policies
Throughout its history, Japan has faced various types of natural disasters, including the Great East Japan Earthquake in 2011. Against this backdrop, the country has developed a wide range of country-specific disaster risk financing (DRF) tools, and encouraged developing countries to follow suit. This chapter is the first attempt to capture the key characteristics of Japan’s own DRF tools and the cross-border DRF policies for development purposes. Specifically, Japan’s earthquake insurance, established in 1966, provides a means of burden-sharing between the public and private sectors through a three-tiered system. The government also tailors its budgetary schemes to various recovery and reconstruction needs, in accordance with the magnitude and characteristics of the disasters. Lastly, the chapter discusses sovereign risk pools and bilateral development loans, both as disaster countermeasures.
Takahiro Tsuda is grateful to Hideaki Hamada and Rie Yamaguchi for their invaluable comments. Yusuke Hayashida, Sokichi Morioka, and Shun Sakata provided much-appreciated research assistance. The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Japanese government.
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