Drought and its impact on economic growth -

Abstract

People in developing countries are more vulnerable to drought. Such events are observed to be of higher impact in poor countries than in rich ones due to the lack of adequate preparedness on the state or the popular level. Is the frequency and intensity of these events helpful in explaining the growth gap between rich and poor countries? To get a clear answer, I will explore the impact of drought on the economy as a whole and on some individual sectors. In the first part I present 2 drought cases which have happened in the last 30 years in Ethiopia and Australia, in addition to the impact and consequences on the economy and the society and the subsequent response taken by the domestic and international parties to overcome this catastrophe. Next I will run an African cross country growth regression including a variable for drought to empirically check its significance and impact on growth. This part of the project would inform the empirical literature on growth and its determinants by exploring the extent to which drought can account for the variations in growth rates between countries.