2003 Volume 5 Pages 353-362
The Central Disaster Management Council emphasizes on both ex-ante measures, such as retrofitting housing structures, and ex-post compensation program, such as housing reconstruction assistance. However, the latter often causes significant moral hazard that may prevent people from self-help activities. These two programs are fundamentally dilemmatic We suggest a new mechanism that can solve the dilemma by means of combining pre and post disaster measures. The fund is coverd to all families in Japan and insures them against future disasters to a certain degree. On the other hand, surplus and income gain of the fund will be invested to the mitigation of the vulnerable houses.
