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The Effect of Natural Disasters at the Rural Level on Economic Growth: Evidence from Indonesia

Year: 2025

Type: article

Abstract: This study examines the effect of natural disasters on economic growth using annual village potential data (PODES) from 33 provinces in Indonesia. Several panel data models, namely Fixed Effect, Random Effect, Robust Fixed Effect, and Generalized Method of Moments (GMM), were tested to ensure robustness. The Robust fixed-effect model was ultimately selected as the most appropriate specification. The result finds that natural disasters, along with government spending on capital, labor, and technology, have a positive effect on economic growth. However, capital depreciation does not show a statistically significant impact. Among all provinces, East Nusa Tenggara consistently recorded the highest proportion of disaster-affected villages from 2011 to 2017. These findings suggest the importance of enhancing disaster mitigation policies to reduce the intensity and coverage of disaster impacts on rural development.

Source: Jurnal Ekonomi Pembangunan Kajian Masalah Ekonomi dan Pembangunan

DOI: 10.23917/jep.v26i1.10819

Authors: Rusli Abdulah, Rr. Retno Sugiharti, Dwi Rahmayani, Tuti Eka Asmarani

Institutions: Universitas Tidar, University of Sheffield, State University of Semarang, Gunadarma University

Language: English

Topic: Disaster Management and Resilience

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDGs: Decent work and economic growth, No poverty, Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $65