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The evolution of poverty and the impact of emergency aid following Hurricane Mitch in Nicaragua

Pascaline DELLA FAILLE DE LEVERGHEM student laureate

°1981 Belgium
Master’s in economic sciences, Facultés Universitaires Notre-Dame de la Paix, Namur, Belgium, 2004

Evolution de la pauvreté et impact de l'aide d'urgence suite à l'ouragan Mitch au Nicaragua

This thesis examines the impact of a major exogenous disaster, Hurricane Mitch, on the evolution of poverty in Nicaragua. The author develops and implements appropriate and sufficiently advanced methods to examine the evolution of poverty in Nicaragua following Hurricane Mitch on the basis of LSMS data of 1998 and 2001 (World Bank). Even though this thesis focuses on the particular case of Nicaragua, the methods used are general and can be applied to a wide range of 'problems'. The formulation and implementation of a programme to fight poverty hinges on the thorough knowledge and understanding of the evolution of poverty, the characteristics of the poorest individuals and the determining factors of poverty.
The second part of the thesis concentrates on the evaluation of an economic policy, viz. emergency aid distributed to the Nicaraguan households. Tools are provided with which to assess whether aid or any other programme has properly targeted the populations it was directed towards (the poorest). Other tools are used to assess the impact of these programmes on the development of the beneficiary households. In this second part the author provides analysis tools to assess the programmes implemented to fight poverty.
The methods to analyse poverty have thus provided an answer to two vital questions: did Hurricane Mitch affect the evolution of poverty in Nicaragua and what impact did the aid have? The answer is that there was no negative impact either on poverty and total food consumption or on the aid provided to the risk population. In conclusion it can be said that none of these factors has hampered the development of the country affected by this disaster. The risk of natural disasters is permanent and recurrent in a country such as Nicaragua, which also struggles with poverty. Tools that allow development aid to be assessed in relation to the risk of natural disasters are extremely useful for the country’s long-term vision.

Report by Prof. Dr Debarati Guha-Sapir, Center for Research on the Epidemiology of Disasters, Université Catholique de Louvain, Louvain-la-Neuve, Belgium