What do governments really want from pre-arranged finance?
Author: Zoe Scott
On-the-ground risk monitoring: engineers examine the quality of wastewater discharged into the sea. Photo: Getty Images
Too often, pre-arranged funding tools for disasters are created to reflect the preferences of financial providers rather than the priorities of the governments that use them. That’s why the Centre is embarking on an ambitious new research initiative to understand what countries really want from pre-arranged finance for disasters.
Why listening to governments can’t wait
Climate change is increasing both the frequency and severity of disasters, making the need for effective pre-arranged financing more critical than ever. High-profile initiatives like the Bridgetown Agenda 3.0 have explicitly called for scaling up pre-arranged financing, while the High-Level Panel on Closing the Crisis Protection Gap recommends a tenfold increase by 2035. Without sufficient understanding of country preferences, there is a risk that innovations will not address government needs, leading to limited uptake and retention of these crucial financial instruments.
Through a year-long research project, we aim to answer two key questions:
1. What do governments value most when it comes to pre-arranged finance? Is it speed, cost, reliability, simplicity, technical support or something else?
2. And what contextual factors shape those preferences? Do factors like a country’s economic situation, access to capital markets, or governance structures play a role?
These questions will be answered by two world-class research teams with deep regional expertise across Africa and the Caribbean: the International Food Policy Research Institute (IFPRI) and University of the West Indies’ Sir Arthur Lewis Institute of Social and Economic Studies.
From Kingston to Nairobi: How governments choose pre-arranged finance
The research methods have now been pilot-tested in two countries, carefully chosen for their potential to reveal useful insights. Jamaica was chosen given their experience with climate-resilient debt clauses, insurance, and catastrophe bonds, providing an ideal testing ground for understanding how governments evaluate different pre-arranged financing instruments. Similarly, the Kenyan pilot leverages the country's experience with various pre-arranged financing instruments, including contingent credit and insurance. It will also help to guide the Centre’s wider ongoing support to the Government of Kenya to develop a national disaster risk financing strategy.
Through a unique mix of qualitative and quantitative methods–including an experimental game–the teams are exploring how governments assess different pre-arranged finance instruments.
Supporting the next generation of pre-arranged financing instruments
By focusing on government priorities rather than provider preferences, this research represents a paradigm shift in disaster risk financing research. Previous surveys may have suffered from response bias and limited scope, focusing primarily on marginal improvements rather than fundamental questions about strategic direction and instrument design. By looking at the bigger picture across diverse regional contexts, this study will generate actionable insights for reforming the architecture of international pre-arranged financing. It promises to contribute to more effective, equitable, and sustainable approaches to managing disaster risk in an era of increasing climate uncertainty.
“This pioneering research represents more than an academic exercise – it embodies our commitment to ensuring that pre-arranged financing instruments truly serve those most vulnerable to crisis.”
Daniel Clarke, Executive Director
Meet the teams behind the research
Two world-class institutions are spearheading this ambitious research initiative, each focusing on a distinct geographic region. The International Food Policy Research Institute (IFPRI) will focus on Africa, with fieldwork in Kenya, Ethiopia, Malawi and Senegal, and a further comparative study in Bangladesh. The team is headed by Dr Berber Kramer and Dr Ruth Hill who bring decades of experience in climate adaptation, risk management and innovative financial instruments across Africa and Asia.
Meanwhile, the University of the West Indies’ Sir Arthur Lewis Institute of Social and Economic Studies will conduct fieldwork in Jamaica, Grenada and Belize. Led by experts Sandra Sookram, Jwala Rambarran and Preeya Mohan, the team combines regional expertise in disaster risk, public policy and economic resilience.
An Advisory Board, including Professor Stefan Dercon (Oxford University), Ato Sufian Ahmed Beker (Ethiopia’s former Finance Minister), Professor Justin Robinson (University of West Indies) and Evie Calcutt (World Bank), will ensure the findings inform real world policy.
Stay tuned!
Sign up to our mailing list to receive notifications of the reports as soon as they are published – scheduled for release in March 2026. These insights will help inform practical policy decisions by governments, multilateral development banks and regional risk pools seeking to better serve client country needs.