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Disaster Impact- and Moderator-Based Empirical Modeling of Disaster Risk Reduction and Management Finance

  • Kedar Satyal,   
  • Netra Prakash Bhandary *

Received: 25 Mar 2026 | Revised: 26 Jun 2026 | Accepted: 16 Jul 2026 | Published: 05 Aug 2026

Abstract

Disasters inflict substantial human suffering and damage physical and financial assets, thereby constraining socioeconomic development. Increasing disaster frequency, intensity, and risk, coupled with constrained financial resources, more prominently in developing countries, underscore the need for evidence-based frameworks to optimize disaster risk reduction and management (DRRM) expenditure. This study examines whether disaster impacts and socioeconomic moderators influence DRRM expenditure allocation in low-income and developing economies, with particular focus in Nepal, where coordination and budgeting challenges remain significant. Using a longitudinal dataset covering 2001–2024, we investigate the relationships between disaster impacts (human losses, affected population, and direct economic losses) and DRRM expenditure while assessing the moderating roles of the Human Development Index (HDI), real GDP, and population. Grounded in a positive economic framework, the analysis employs stationarity tests and robust regression techniques to contribute to the literature on disaster-finance responsiveness in low-income, multi-hazard contexts. Bivariate correlations show negative associations between DRRM budget expenditure and human loss and affected population, but a positive association with direct economic loss. Regression models, in contrast, reveal significant positive associations between DRRM spending and all three disaster impact measures, indicating that spending is predominantly reactive, driven by relief and emergency response following human impacts and by compensation, recovery, and reconstruction following economic loss. Model performance improves when disaster impacts are considered jointly, while HDI, real GDP, and population further enhance explanatory power. These findings indicate that DRRM budgets are shaped by both disaster impacts and socioeconomic conditions, highlighting the need for context-sensitive budgeting frameworks that strengthen ex-ante risk reduction and resilience-building investments alongside post-disaster response and recovery.

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DOI
10.53941/jhrr.2026.100019
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Volume 1, Issue 1
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Satyal, K.; Bhandary, N. P. Disaster Impact- and Moderator-Based Empirical Modeling of Disaster Risk Reduction and Management Finance. Journal of Hazards, Risk and Resilience 2026, 1 (1), 19. https://doi.org/10.53941/jhrr.2026.100019.
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