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This paper explores the impact of natural disasters on developing countries' GDP
growth tail risk. Using quantile local projections on data for 75 developing economies
from 1970-2021, our results reveal that natural disasters lead to a persistent decrease at
the 10th percentile of economic growth. In addition, agricultural and industrial growth
at the 10th percentile experience significant declines. However, the services sector shows
a less persistent response and, in some cases, a reversal that may be due to increased
demand post-disasters. When splitting countries by income level, we observe that highincome
developing countries better counteract the adverse effects of natural disasters. In
contrast, low-income countries appear to lack the capacity to mitigate associated risks
effectively. Finally, when studying the impact of institutional arrangements and government
effectiveness in mitigating natural disaster risk, we find that autocratic countries have a
slightly higher vulnerability to natural disasters than democratic countries. At the same
time, better public institutions are associated with lower growth tail-risk.
