Risk-Based Disaster Financing Governance: Assessing the Effectiveness of On-Call Funds, Village Funds, and Regional Budgets for Disaster Risk Reduction
DOI:
https://doi.org/10.62894/m8e6d162Keywords:
disaster financing; risk-based budgeting; on-call funds; village funds; regional budgets; disaster risk reduction; local governmentAbstract
This study examines risk-based disaster financing governance by analyzing the effectiveness of on-call funds, village funds, and regional budgets in disaster risk reduction. The study is based on the argument that disaster financing should not be understood only as an emergency response mechanism, but also as a preventive governance instrument for reducing vulnerability, strengthening preparedness, and improving regional resilience. Using a qualitative case study approach, this research analyzes how disaster financing instruments are planned, allocated, coordinated, implemented, and evaluated at the local government level. Data were collected through in-depth interviews, field observations, and document analysis involving local disaster management agencies, regional planning agencies, financial management agencies, village governments, sectoral offices, disaster volunteers, and community representatives in disaster-prone areas. The findings show that on-call funds are effective in supporting rapid emergency response, but their contribution to long-term risk reduction remains limited when not supported by preventive financing. Village funds have significant potential for community-based mitigation and preparedness, yet their effectiveness depends on risk-informed village planning and technical capacity. Regional budgets can finance broader cross-sectoral risk reduction, but their implementation is often fragmented across institutions. This study proposes a risk-based disaster financing governance framework that connects risk assessment, fiscal planning, budget allocation, implementation, monitoring, and outcome-based accountability. The novelty of this study lies in shifting disaster financing analysis from reactive emergency expenditure toward preventive investment for disaster risk reduction and regional resilience.
References
Adhasara, A., Qadri, R. A., & Aprilia, R. (2022). Disaster risk financing and insurance: How far have we known? Bina Ekonomi, 26(1), 76–95. https://doi.org/10.26593/be.v26i1.5534.76-95
Amri, A., Bird, D. K., Ronan, K., Haynes, K., & Towers, B. (2017). Disaster risk reduction education in Indonesia: Challenges and recommendations for scaling up. Natural Hazards and Earth System Sciences, 17(4), 595–612. https://doi.org/10.5194/nhess-17-595-2017
Bevan, D., & Cook, S. (2015). Public expenditure following disasters. World Bank Policy Research Working Paper No. 7355. https://doi.org/10.1596/1813-9450-7355
Feofilovs, M., Romagnoli, F., & Blumberga, D. (2024). System dynamics modelling for disaster risk financing and insurance mechanisms: Toward adaptive resilience governance. Journal of Infrastructure, Policy and Development, 8(9), Article 7492. https://doi.org/10.24294/jipd.v8i9.7492
Haris, N. (2023). Disaster risk index on disaster management budgeting: Indonesia’s national data set. Jàmbá: Journal of Disaster Risk Studies, 15(1), Article a1365. https://doi.org/10.4102/jamba.v15i1.1365
Hidayati, U., & Halimatussadiah, A. (2022). Pengetahuan rumah tangga terhadap bencana alam di Indonesia. Jurnal Riset Pembangunan, 4(2), 67–82.
Lis, E. M., & Nickel, C. (2010). The impact of extreme weather events on budget balances. International Tax and Public Finance, 17(4), 378–399. https://doi.org/10.1007/s10797-010-9144-x
Miao, Q., Hou, Y., & Abrigo, M. R. M. (2018). Measuring the financial shocks of natural disasters: A panel study of U.S. states. National Tax Journal, 71(1), 11–44. https://doi.org/10.17310/ntj.2018.1.01
Noer, K. U., Putri, A. A. S., Syahputro, P. M., Ketiara, K., Kusuma, A. A., & Lestari, E. R. (2023). Village fund allocation for disaster mitigation: Solution or another gimmick? International Journal of Application on Sciences, Technology and Engineering, 1(1), 248–252. https://doi.org/10.24912/ijaste.v1.i1.248-252
Pleterski, N. (2025). Parametric insurance for sustainable disaster risk finance: Legal, data, and governance pathways in Slovenia and Croatia. Sustainability, 17(21), Article 9643. https://doi.org/10.3390/su17219643
Purwandari, B., Rahmawati, R., & Pratama, A. R. (2024). Community-based catastrophe insurance as a sustainable economic loss risk management instrument. Risks, 12(6), Article 94.
Soetanto, R., Hermawan, F., Milne, A., Utomo, J., & Hatmoko, J. U. D. (2020). Developing sustainable arrangements for proactive disaster risk financing in Java, Indonesia. International Journal of Disaster Resilience in the Built Environment, 11(3), 435–451. https://doi.org/10.1108/IJDRBE-01-2020-0006
Song, Y., Sutrisna, M., & Proverbs, D. (2024). The value of resilience bond in financing flood resilient infrastructure. Journal of Sustainable Finance & Investment, 14(4), 889–912. https://doi.org/10.1080/20430795.2024.2366200
Tang, R., Wu, J., Ye, M., & Liu, W. (2019). Impact of economic development levels and disaster types on the short-term macroeconomic consequences of natural hazard-induced disasters in China. International Journal of Disaster Risk Science, 10(3), 371–385. https://doi.org/10.1007/s13753-019-00234-6
Unterberger, C. (2018). How flood damages to public infrastructure affect municipal budget indicators. Economics of Disasters and Climate Change, 2(1), 5–20. https://doi.org/10.1007/s41885-017-0020-5
Wiyanti, A., & Halimatussadiah, A. (2021). Are disasters a risk to regional fiscal balance? Evidence from Indonesia. International Journal of Disaster Risk Science, 12(6), 839–853. https://doi.org/10.1007/s13753-021-00374-2
Xu, X. (2019). Prospects for disaster management in China and the role of insurance. Environmental Hazards, 18(5), 383–399. https://doi.org/10.1080/17477891.2019.1609404
B. Policy and Institutional References
Badan Nasional Penanggulangan Bencana. (2020). Rencana Nasional Penanggulangan Bencana 2020–2024. BNPB.
Kementerian Keuangan Republik Indonesia. (2022). Strategi pembiayaan dan asuransi risiko bencana. Kementerian Keuangan Republik Indonesia.
Kementerian Desa, Pembangunan Daerah Tertinggal, dan Transmigrasi Republik Indonesia. (2021). Peraturan Menteri Desa, Pembangunan Daerah Tertinggal, dan Transmigrasi Nomor 7 Tahun 2021 tentang Prioritas Penggunaan Dana Desa Tahun 2022. Kementerian Desa, Pembangunan Daerah Tertinggal, dan Transmigrasi Republik Indonesia.
United Nations Office for Disaster Risk Reduction. (2015). Sendai Framework for Disaster Risk Reduction 2015–2030. UNDRR.
World Bank. (2021). Indonesia disaster risk finance and insurance. World Bank.
World Bank & Global Facility for Disaster Reduction and Recovery. (2019). Indonesia: Advancing a national disaster risk financing strategy. World Bank.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Mujahidin, Lalu Ahmad Murdhani (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.
