A survey of the theory and measurement of economic vulnerability and resilience to natural hazards

About four decades ago, the discourse on disasters was largely about natural hazards and their characteristics. The failure of this approach to substantially explain disaster impacts led to a change in paradigm. This new paradigm places its emphasis on the influence of vulnerability and resilience on the resulting impacts of disaster– be they direct or indirect. Disasters triggered by natural hazards have since been perceived as un-natural occurrences brought about by a confluence of societal factors. Economic vulnerability and economic resilience, interacting with the hazard itself and the exposure of populations and economic systems, are considered critical determinants of the resulting disaster impacts. The theoretical conceptualization and empirical measures of vulnerability and resilience, however, remain subjects of contentions. An apparently dominant view is that while vulnerability and resilience have similar underlying factors, they refer to different things. For instance, economic vulnerability and economic resilience are both shaped by the level of development, quality of development governance, and characteristics of development (widespread inequality, rapid and unplanned urbanization, etc.), yet vulnerability is considered a pre-disaster concern, while resilience, a post-disaster issue. Here, vulnerability is taken as that component of disaster risk that explains the varying impacts on elements (people, assets, systems) that have the same level of exposure to a given hazard. Resilience is what enables the exposed elements to withstand, cope and recover from disaster impacts. Thus, in terms of disaster risk reduction priorities, vulnerability is typically linked to prevention, preparedness, and mitigation; while resilience, to rehabilitation, reconstruction, and recovery. The intensified application of economic theory resulted in important advances in concretizing the concepts of economic vulnerability and resilience, as well as in measuring them. Overall, the ultimate aim for these is for a sound and widely-accepted set of concepts and measures that can be easily adjusted for practical application in different contexts (e.g. developed and developing countries), levels of assessment and governance (e.g. macro and micro; community, city, province, country), hazard types (e.g. meteorological and geologic), and elements at risk.