Coups, cyclones and recovery: the Fiji experience

Abstract

Fiji has in recent years suffered considerable disasters, both natural and man-made. Here we estimate the immediate impact of these disasters on the level and rate of growth of GDP. Our regression estimates using annual data from 1970 to 2000 suggest that coups, on average, reduce per capita output for the subsequent calendar year by 14 per cent. Natural disasters, in contrast, lower output on average by 3 per cent only. The impact on investment of the two forms of disasters are a lot starker; while coups on average reduce per capita investments for the calendar year by 40 per cent, natural disasters tend to boost investment. This difference in impact on investment has long-run consequences for growth of output and economic recovery. Policy has a significant role to play in ameliorating some of the adverse consequences of man-made disasters.