Abstract :

Natural disasters can affect territories not just once but repeatedly, with increasing frequency and intensity. This paper analyzes the causal impact of natural disasters on municipalities' budgetary decisions, accounting for both the sporadic nature and repetition of these extreme events. Using an original dataset covering all French municipalities from 2000 to 2022, I employ a staggered difference-in-differences methodology with a non binary treatment approach. The findings reveal that each disaster triggers an immediate increase in municipal spending, followed by a long-term rise in tax revenues. Additionally, a heterogeneity analysis highlights variations across territories vulnerability and disaster types, shedding light on the specific factors that shape municipal responses. 

Keywords : Local public finance, Local expenditure, Natural disasters

JEL Codes : H72, Q54, R50