An institutional approach to vulnerability: evidence from natural hazard management in Europe

Institutions play a significant role in the development of the society by controlling the social and economic behaviour of the people (Hodgson 1988, North 1990, Vatn 2009) . In disaster risk management, this behaviour relates to choices concerning the protection from natural hazards. According to Frey (1990), institutions may belong to one of these categories:

• Formal rules: legal instruments, regulations, government guidance, policies and plans that are strongly related to disaster risk reduction activities (Tompkins et al 2012).
• Informal institutions: rules such as customs, traditions and unwritten laws that determine human behaviour, actions and decisions and may be directly connected to the distribution of information, response to a hazardous event, community participation, risk perception, public awareness and accountability (Tompkins et al 2012).
• Organisations: special institutions with clear boundaries and members (Hodgson 2007). They include public administration, and governmental organisations such as ministries as well as funding agencies and research institutes (Garschagen 2013) but also NGOs, political parties or volunteers and even groups such as families, clubs and clans (Fuchs 2009).

There is no universal concept of vulnerability and for this reason there is a wide range of definitions in the literature deriving from different scientific disciplines (climate change research, natural and social science, engineering, etc). In an effort to understand the concept of vulnerability numerous conceptual frameworks have been developed (e.g. BBC (Bogardi, Birkmann, Cardona)) conceptual framework, Bohle's conceptual framework, Pressure and Release model (PAR) etc, Birkmann 2006). The PAR model in particular is based on the assumption that risk is the result of the occurrence of a natural phenomenon in combination with unsafe conditions that are the result of a number of dynamic pressures that are initiated by root causes. According to Wisner et al (2004), root causes are general and widespread processes in the society or world economy that are temporarily and spatially distant to the event such as political and economic systems, access to power, structures and resources. Dynamic pressures, on the other hand, are more immediate processes and activities such as lack of local institutions, skills and training or rapid population change and deforestation. Finally, the unsafe conditions express vulnerability in conjunction with the hazard, e.g. unprotected buildings, dangerous locations, special groups at risk and lack of preparedness. In the context of the present paper, the unsafe conditions of the PAR are directly related to indicators used to analyse most of the vulnerability dimensions (physical, social, economic, etc), whereas the root causes and dynamic pressures refer more to the institutional context of the society under investigation and relate to the drivers of institutional vulnerability.

According to Paul (2011), institutional vulnerability does not refer to the vulnerability of the institutions but to their role in causing societies to become more vulnerable to natural hazards. This shows clearly the interaction of institutional vulnerability to the other vulnerability dimensions. Hochrainer (2006, p 18) describes institutional vulnerability as 'the existence and robustness of institutions to deal with natural disasters'. On the other hand, Birkmann et al (2013, p 201) define vulnerability as 'the potential for damage to governance systems, organisational form and function as well as guiding formal/legal and informal/customary rules-any of which may be forced to change the following weaknesses exposed by disaster and response'. We define institutional vulnerability as 'the combination of the weaknesses embedded in institutions (purpose or non-purpose built for disaster management) that reduce the capacity to resist/withstand/cope or recover from the impact of a hazardous event' (Papathoma-Köhle and Thaler 2018, p 107). According to Papathoma-Köhle and Thaler (2018), these weaknesses are directly rooted in the socio-political and legislative context (e.g. land use regulation) but also in the socio-cultural context (public participation, risk perception) as well as the financial context (e.g. risk transfer mechanisms).

Institutional vulnerability is not to be confused with risk governance although both terms are closely related. According to UNDP (2013), risk governance is the way in which different actors (including authorities, the public, etc) cooperate in order to manage and reduce disaster risk. This can be achieved (or not) given a strong institutional framework. Institutional vulnerability concerns the weaknesses of this background and it is not synonymous to risk governance.

At this point, it is important to emphasize that herein the focus is on the way institutions affect vulnerability to natural hazards and not the vulnerability of institutions. Moreover, we are limited to natural hazards meaning mainly geo- or hydrometeorological hazards and not technological or biohazards. As far as the scale is concerned, we consider institutions at the local, regional and national scale. Last but not least, the previous paragraph clearly shows also the limits of institutional vulnerability as far as other terms (e.g. risk governance) is concerned.

This pillar is associated with informal institutions and focuses on the socio-cultural status of a community including the use of local knowledge and practices, the level of community participation, the risk perception and public awareness which is connected to socio-economic and cultural characteristics (religion, financial capacities, educational level, etc). It also relates to the informal rules including human behaviour, customs and traditions that together with past experiences and trust in local authorities and experts form the perception of risk (Wachinger et al 2013). Positive aspects of the socio-cultural status are often associated with the so-called 'indigenous' or 'traditional' knowledge and coping mechanisms (Twigg 2015). Such an example is the island of Simeulue in Indonesia which suffered a disproportionally low number of deaths in comparison with neighbouring islands during the 2004 tsunami (Gaillard et al 2008). According to Gaillard (2008) the residents of Simeulue used local knowledge to respond to the 2004 tsunami that resulted in significantly low casualties. Local knowledge and practices, however, are relevant in all phases of the risk cycle. During the reconstruction phase, for example, the use of local knowledge and local practices may lead to the development and promotion of resilient buildings such as in the case of Manizales (Colombia) where earthquake resistant traditional buildings (bahareque) are promoted and maintained for this reason (Suarez 2011).

Participation, meaning the active involvement of people to decision making, plays also a central role in the way societies manage risks but it is often undermined by societal inequalities. According to Cohen and Werker (2008), the lower the social homogeneity in a country the higher the death toll from natural hazards is. Past events such as Katrina in 2005 have demonstrated that institutional policies create and maintain segregated societies. In more detail, in New Orleans, the fact that black people lived in high flood hazard areas was due to low income and employment which was related to racial disparities (Henkel et al 2006). Furthermore, during the response phase, most of the black population could not evacuate due to financial reasons. Finally, during reconstruction, the black population rehabilitated slowly in comparison with the white population due to mistrust and discrimination (Henkel et al 2006).

The connection between this pillar and the social dimension of vulnerability is evident since low risk perception, limited participation of the public and non-inclusion of local knowledge and practices in disaster management may directly influence the copying capacity of the population increasing the social and cultural vulnerability. Moreover, by ignoring local techniques in building practices the physical vulnerability of the built environment may increase.

Preparedness, response and recovery following the occurrence of natural hazards are clearly political tasks (Albrecht 2017). Hence, the response to natural hazards is strongly related to the level of democracy and the political stability of the country. This was clearly supported by research showing that the vast majority of deaths due to natural hazards (more than 80%) between 1964 and 2004 were recorded in 15 countries. The majority of these countries (87%) are also below the mean democracy index which represents the level of accountability, violence, regulatory quality, rule of law, government effectiveness and control of corruption (van der Vink 2007). Moreover, according to the World Bank & United Nations (2010) less democratic countries suffer more deaths from natural or man-made hazards, however, the number of deaths is also related not only to public awareness but also to the credibility of politicians to commit to the citizens.

Furthermore, the effectiveness of the government plays a significant role in the capacity of dealing with natural hazards. Government effectiveness may include the quality of public and civil services and their dependence from political pressures, the quality of policy formulation and implementation and the credibility of the commitment to such policies (Kaufmann et al 2010). Moreover, political stability also guarantees a proper functioning of institutions in natural hazard emergencies. The responsibility of the different actors before, during and after a hazard event—often described as accountability—also controls the institutional capacity of a society (Saechao 2007). Twigg et al (2001) consider accountability a synonym of sharing risks and responsibilities among actors, stakeholders and citizens. According to Amaratunga et al (2016), the lack of accountability of governments, public authorities, officials and institutions and other stakeholders may lead to increased material costs and casualties. It is clear that accountability issues are relevant in all the phases or the risk cycle. As far as the responsibility to prevent is concerned, vivid example is the one of Chernobyl in 1986 when the former Soviet Union failed to notify neighbouring affected countries (Saechao 2007). Regarding responsibility to react, Hurricane Katrina exposed the deficits of the response mechanism of the United States and the accountabilities of officials. During the reconstruction phase, experiences following earthquakes, show that deficits in accountability of officials may be associated with financial constraints (Saechao 2007).

Finally, lack of transparency and corruption are important aspects related to the institutional vulnerability. Corruption is 'the abuse of entrusted power for private gain' (Transparency International 2010) contributing to social and ecological imbalance and the vulnerability of industry, commerce, construction, health and agriculture (Lewis 2011). As far as natural hazards are concern, research suggests that there is connection between corruption, underdevelopment and disasters (Lewis 2011). Corruption is directly connected with insufficient rule of law, lack of implementation of land use and building regulation, and consequently buildings of bad quality that may lead to more disaster related deaths. More precisely, data from 344 earthquake events in 42 countries for the period 1975–2003 demonstrated a positive correlation between the level of public sector corruption and the number of deaths (Escaleras et al 2006). Corruption in the construction industry is often the reason for disaster related victims, but also corruption in other sectors may have similar results. For example, the consequences of the floods in Pakistan in 2010 may be also connected to illegal deforestation as a result of corruption (Lewis 2011). Similar examples from Bangladesh are provided by Rahman (2018) who suggests that corruption reduces the capacities of the society to respond to climatic stressors such as sea level change, biodiversity degradation, saltwater intrusion and desertification. Furthermore, Mahmud and Prowse (2012) investigate how corruption in Bangladesh may influence pre- or post-disaster interventions in different groups of the society.

In the national scale, apart from legislation concerning the civil protection mechanism (CPM) and the financing of disaster risk reduction strategies, legal frameworks and policy strategies can contribute significantly to disaster risk reduction. However, they may also trigger a number of conflicts between authorities and the public or local businesses.

Regarding land use planning, the implementation of exclusively structural measures in the past encouraged development within the 'protected' areas increasing the vulnerability of parts of the community and leading to the so-called 'levee effect'. This term was first used by Burton and Kates (1964) referring to the extensive use of the land between the levee and the river by farmers in the USA in the 1960s. Nowadays, however, non-structural risk management solutions, such as land use planning regulations, are generally favoured and are used in combination with structural measures. Nevertheless, the 'levee effect' can be still observed in many places in Europe, such as the European Alps (Fuchs et al 2017), the Netherlands and Italy, as well as the USA (Di Baldassarre et al 2015). Land use planning may contribute significantly to disaster risk reduction, however, it may also trigger a number of conflicts between authorities and the public or local businesses. For this reason, land use planning instruments such as hazard zones have to be communicated to the public in the right way ideally based on public participation. Conflicts are often related to building restrictions within the hazard zones or relocation requirements of existing buildings.

Legislation does not only determine where we build but also how (Holub et al 2012, Attems et al 2019). Building regulations are essential, especially in the reconstruction phase, in order to ensure that the buildings will be built in such a way to withstand future natural hazards. The building codes are a very strong tool for disaster risk reduction, however, there are two drawbacks associated with them. The first one is their implementation. The availability of building codes does not guarantee their implementation. There are plenty of examples worldwide (e.g. in Turkey, Taiwan, El Salvador, India, Italy and Japan) showing that despite the availability of building codes, due to corruption, indifference and lack of adequate personnel, the codes were not implemented (Wisner et al 2004). The second drawback is the fact that buildings built before the implementation of the newest building codes are often the majority and they are still in use. For example, in Greece, 65% of the reinforced concrete building stock was built before 1985. Nevertheless, since 1985 the seismic building codes have been reviewed and updated twice (Pomonis et al 2014).

Finally, environmental legislation (e.g. legislation related to deforestation, air pollution, land degradation, etc) also influences the exposure and vulnerability of communities and natural resources. The lack of this type of legislative framework, its quality and implementation may influence the institutional vulnerability to natural hazards significantly. Additionally, conflicting policies reflecting conflicting national priorities may also lead to inability of legislation to protect the environment and consequently people and the built environment from natural hazards. An example that highlights this conflict is the inability of the government in Bangladesh to protect mangroves from commercial shrimp farming (Ishtiaque and Chhetri 2016).

This pillar of institutional vulnerability may directly influence the physical, economic, social and environmental vulnerability since it relates to characteristics of the society that may influence the capacity of the build environment and the society to withstand the impact of a hazardous process. Indirectly, legislation influences also the risk transfer and CPMs that are based on specific legislative frameworks.

This pillar is related not only to the household budget of individuals but also to the national budget and the financing of organisations and agencies that are essential to the management of natural hazards, as well as to the financing of relief and reconstruction. The latter is strongly related to available public and private risk transfer mechanisms.

As most of the organisations involved in the management of natural hazards are public, this pillar reflects eventually the financial status of the country or region. However, the financing of organisations and works is not only based on available funds but also on decisions that reflect the priorities of governments.

Lack of national budget and support often decreases protection by communities. In particular, the recent financial and economic crises and fiscal squeeze reduced community resilience (Thaler and Priest 2014). Besides, the capacity to bounce back better is related to the available risk transfer mechanisms. Reconstruction costs following disastrous events often exceed the capacities of the affected population and, therefore, costs are transferred, shared or spread among several entities such as international aid organisations, the public sector and the insurance industry. A good share of the costs between these sectors can enable a promising and effective resilient reconstruction. However, events with extensive media coverage attract enormous amounts of international aid that often is not used adequately to ensure a sustainable 'build back better'. A good example is the case of the 2004 Indian ocean tsunami. Although a record donation of nearly US$13.5 was collected (Smith 2013), it was not used efficiently for the reduction of existing vulnerabilities that could reduce the risk to future tsunamis (Khasalamwa 2009).

As far as developed countries are concerned, the state or private insurance companies bear the majority of the reconstruction costs. Worldwide, private insurance penetration varies significantly. Indicatively, the global distribution of premiums per capita for non-life insurance shows that in the US the insurance premium per year for the average citizen is as high as US$500 whereas in Africa or parts of Asia is less than US$5. Communities and authorities have to face in this case the so-called 'natural disaster syndrome' which is the combination of ex ante low investment in preparedness and ex post high costs of reconstruction (Kunreuther 1996). It is in fact remarkable that in many African countries there is no insurance coverage whatsoever (Linnerooth-Bayer et al 2011). In this part of the world, insurance coverage is often the privilege of some wealthy households or industrial and commercial assets that can afford it (Arnold 2008). On the other hand, in some parts of Europe (e.g. Germany and Romania), low income households have a priority with regard to potential financial assistance from the state (Priest 2014). Nevertheless, in the European Union, the market penetration rate of disaster insurance is generally low but varies according to the hazard type. In detail, penetration rates for insurance for storms is higher than that for earthquakes or floods (European Commission 2013).

Phenomena such as adverse selection, and moral and charity hazard influence negatively the market of private insurance (Browne and Hoyt 2000, European Commission 2013, Raschky et al 2013). In more detail, charity hazard is the phenomenon of some households that are deliberately not private insured because they rely on 'charity', meaning public insurance or aid from their social network or international organisations (Browne and Hoyt 2000). On the contrary, households that have bought insurance, underinvest on preparedness measures because they rely on knowing that they will be compensated after an event. This phenomenon is called 'moral hazard' (Raschky et al 2013). Finally, 'adverse selection' is the tendency of some households to buy private insurance only when they perceive a risk as particularly high (European Commission 2013). All these phenomena can be reduced by the development of successful public private partnerships that can promote local adaptation measures for lower insurance premiums (Kleindorfer and Kunreuther 1999).

Risk transfer needs a strong institutional environment in order to function. In many developing countries, poor management practices in the public sector, inadequate risk statistics, insufficient systems for loss valuation and claim settlements cannot support an insurance system even if the latter is available (Pettersen et al 2005, Cavallo and Noy 2009).

This pillar shares many characteristics with the social and economic dimension of vulnerability. Lack of accountability may lead to reduced coping and administrative capacity. Political instability may lead to weakening of the economy and eventually the financing of institutions and mitigation measures that will affect the physical and economic vulnerability. Moreover, lack of democracy has a direct impact on the legislation quality and implementation. Transparency, on the other hand, is directly associated with corruption which also weakens law implementation and leads directly to increased exposure and physical vulnerability.

In order to understand the structure of institutional vulnerability (pillars) and its interaction to other vulnerability dimensions, an institutional vulnerability framework was developed (figure 1). The framework shows the main pillars of institutional vulnerability, the interaction among them and the drivers attached to each one of them. Additionally, the relationship between the drivers of each pillars and vulnerability indicators for different dimensions is also demonstrated.

One of the challenges in understanding and analysing institutional vulnerability is related to the interaction among the four pillars. It is clear that differences in the socio-political context will affect decisions related to the national budget, affecting the fiscal-economic pillar directly. Moreover, legislation related to risk transfer mechanisms (e.g. mandatory private insurance) will have an impact on the fiscal-economic pillar which is directly related to the financing of the recovery following natural hazards. The socio-cultural pillar is closely connected to the socio-political one since the nature and quality of the political system often reflects the requirements and expectations of the lay people which are based on their culture and experiences. Moreover, a society with a weak democratic base is not expected to allow its citizens to take initiatives and participate in decisions that are related to disaster management. In undemocratic/totalitarian regimes the government may tend to take decisions for the citizens using a top down approach.

The connections between drivers and indicators of other vulnerability dimensions are shown in the framework but are not exhaustive. Most of the connections shown in figure 1 are the most direct and straightforward connections anticipated. For example, it is expected that changes in building codes will directly influence the physical vulnerability of buildings. The presence of hazard zone planning is expected to improve land use planning and reduce the exposure of buildings. However, there are also indirect connections. For example, the presence of risk transfer mechanisms (private or public insurance, reinsurance etc) will directly support the recovery and rehabilitation phase but, it can also indirectly contribute to the decrease of physical vulnerability by motivating homeowners to adapt their buildings. Furthermore, lack of transparency may influence the enforcement of building codes reducing in this way the physical vulnerability of buildings. Single drivers may influence more than one indicator and the adjacent vulnerability dimension. For example, environmental legislation may influence environmental vulnerability (e.g. air quality, sensitive habitats, water reserves) but also economic vulnerability (forest productive areas, agricultural areas). The vulnerability indicators may vary according to the country, environmental context (mountain, coastal, urban etc) and the scale (global, national, regional, local/community) and, therefore, the list of indicators cannot be considered exhaustive. Nevertheless, the framework gives an overview of the overarching aspect of institutional vulnerability and its interaction with other vulnerability dimensions.

4.1.1. The institutional background of Greece

4.1.2. The institutional vulnerabilities of Greece

In Greece, institutional vulnerabilities may be related to many different aspects including the government system, insufficient funding, shifted responsibilities, problems of fit and interplay among services and officials, inadequate land use practices (e.g. lack of completed cadastral survey), shortage of resources, enforcement of rules and access and use of scientific and local knowledge (Morehouse et al 2011).

Additionally, Greece has been subjected to significant socio-economic changes due to the financial crisis and the austerity measures that have been recently forced in the country (Mavridis 2018). Reforms enforced to Greece by its creditors demolished economy, increased unemployment, poverty and social exclusion as well as tax evasion and corruption (Mavridis 2018). Governments performed significant cuts in public expenditures including the way authorities and individuals manage natural hazards (Kassaras and Sotirhos 2015, Mavridis 2018).

Kassaras and Sotirhos (2015) suggest that the physical vulnerability of buildings has been increased since between 2010 and 2015 because the construction industry has been reduced by approximately 70% resulting in a large amount of people residing in older buildings. In parallel, seismic training of the population suffered also from reduced funds and is considered as inadequate. Moreover, despite the scientific potential and modern observational infrastructure, cuts in funding and personnel have reduced the performance of the institutes involved in earthquake monitoring. Additionally, a potential earthquake will challenge the first aid agencies as well as the response mechanism that are weakened due to limited funds. Kassaras and Sotirhos (2015) also argue that the financial crisis has increased social (unemployment, social exclusion, etc) and physical (degrading building quality, safety of public facilities, schools, etc) vulnerability. Sapountzaki and Chalkias (2014) claim that reforms due to the financial crisis include personnel, financial support, technical means and skills loss of organisations and agencies for civil protection. Budget cuts have also led to closure and merging of organisations, changes in forest policy and wildfire protection leading to reduced funds for seasonal personnel, clearance of forest fuels, opening of forest road network and maintenance of equipment. For example, the annual budget for fire services was reduced by one fourth in 2019 (Boitard 2018). These budget cuts have led to the obsolescence of at least 30% of the fires engines due to lack of maintenance (Smith 2018). An expression of this vulnerability was unfortunately reflected on the consequences of the forest fires near Athens in the summer of 2018 that claimed 102 lives and destroyed more than 1500 buildings (Goldammer et al 2019). Furthermore, a significant decrease of the household income and increase in poverty, social exclusion, unemployment, and psychological illnesses have been recorded and have a direct impact on the social vulnerability to natural hazards (Sapountzaki and Chalkias 2014, Kassaras and Sotirhos 2015). Finally, changes in the public administration (e.g. merging of municipalities) have negative consequences on the way natural hazards are managed (Ladi 2014).

The institutional vulnerabilities of Greece can be shown in the framework of figure 2. From the figure it is clear that the financial crisis has mainly affected the socio-political and the fiscal economic status. For example, changes in the accountability will eventually affect the administrative capacity of areas affected from natural hazards having a direct impact on the many vulnerability dimensions including the social and physical dimension. Moreover, changes in the national budget (mainly cuts) may directly affect the financing of institutions and mitigation measures as well as local adaptation measures that will have a direct effect on the physical vulnerability of buildings and infrastructure. Moreover, national budget cuts will increase unemployment for some sectors affecting in such a way not only social but also economic vulnerability. It is clear that the financial crisis has multiple impacts on the society and that the other pillars have been or will be directly or indirectly affected, therefore, further research is required.

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4.2.1. The institutional background of the UK

4.2.2. The institutional vulnerabilities of the UK

On 31 January 2020 the UK officially left the European Union. Following the referendum in 2016 and until January 2020, continuous negotiations together with numerous unsuccessful attempts to convince the parliament to accept a Brexit deal created high uncertainty which was reflected on many sectors, including employment and inflation rate (Inman 2019). As far as the future is concerned, it is expected that Brexit may lead to changes in environmental legislation in terms of implementation of the European Water Framework or the European Floods Directive (Burns and Carter 2018, Fraser et al 2020). That could lead to an increase of environmental and physical vulnerability. Moreover, it is anticipated that Brexit will have a negative effect on poverty and unemployment, increasing in this way the social vulnerability of people to natural hazards but also the physical vulnerability since homeowners will not be able to invest in maintaining their buildings.

Furthermore, government spending on disaster risk management activities and related works may be also reduced. Regarding flood protection, there are concerns that, since flood defence works are often funded by EU regional development plans, there will be shortages in this respect (Black et al 2017) increasing exposure and physical vulnerability. Moreover, having left the European Union, Britain will not be able anymore to get assistance from the EU Solidarity Fund which provides financial assistance to EU countries following the occurrence of natural hazards. Additionally, a large number of multi-lateral and bilateral agreements and treaties will not be valid anymore and will have to be renegotiated. In fact, at least 759 treaties that are essential for the function of the country will have to be renegotiated (McClean 2017). It is still unclear how the UK will address the fact that they will not participate in EU initiatives that relate to environmental security, and community and infrastructure resilience in the post-Brexit era. These initiatives include the European Programme for Critical Infrastructure Protection, the Directorate-General for European Civil Protection and Humanitarian Aid Operations, the CPM and the associated Emergency Response Coordination Centre, as well as the EU Energy Security Strategy (Black et al 2017). Moreover, research on natural hazards will also suffer since the UK will not have access to EU research funds (MacKenzie 2016). Additionally, a point of concern is the transboundary flood risk management system between Northern Ireland and Republic of Ireland as both countries have no international treaty about water management as well as multiple transboundary catchments (Fraser et al 2020). The consequences of Brexit for flood risk management might be uncertainty regarding the legislative framework in Northern Ireland as well as poor collaboration between both countries in flood risk management including emergency management, common protection strategies, etc.

In figure 3, the institutional vulnerabilities of Great Britain that are related to Brexit are depicted. In more detail, changes in environmental and land use planning legislation will have a direct impact on exposure and environmental quality which will directly affect physical and environmental vulnerability. Political instability has a direct effect on the way national budget is managed directly affecting the financing of relevant institutions and mitigation measures. This will directly affect the physical vulnerability of buildings and infrastructure. Indirect effects of Brexit could be also depicted on this framework after some further research.

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4.3.1. The institutional background of Austria

4.3.2. The institutional vulnerabilities of Austria

In Austria, the market penetration of private property insurance is exceptionally low (Thaler and Fuchs 2020). The main reason is the option of being compensated through the Austrian Catastrophe Fund (Republik Österreich 1966, 1996), even if claimants only receive a compensation between 20% and 50% of documented loss (Thaler and Fuchs 2020). Although the financing of the Fund is centrally organised and derives from surcharges on taxes, the federal states decide how the fund will be distributed to the homeowners in need (Holub and Fuchs 2009). Nevertheless, federal states that are often impacted by floods pay the same premium (as percentage of their share from income taxes) as federal states with lower exposure to floods (Holub and Fuchs 2009). Furthermore, the Catastrophe Fund but also private compensation schemes do not include strategies for the reduction of physical vulnerability or the promotion of sustainable housing. In fact, these administrative practices are unlikely to change without legislative rules and political guidance (Thaler and Fuchs 2020). Finally, when the budget reaches the amount of 29 million euros it is used for other expenses and it may not be available when needed (Holub and Fuchs 2009).

Austria's weaknesses of the existing risk transfer mechanisms are expected to influence the existence of local adaptation measures and, eventually, the robustness of the built environment as well as the coping capacity of the homeowners following a catastrophic event, leading to an increase in physical vulnerability (figure 4).

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