Natural disasters cause significant mortality, but the mechanisms and potential policy responses remain poorly understood. This paper studies Mexico’s FONDEN, an indexed disaster fund that rapidly disburses resources to affected municipalities. Using variation in fund eligibility and disaster intensity, I find that access to indexed disaster funds prevents approximately 75% of post-disaster excess mortality.
The effects are concentrated among vulnerable populations and in municipalities with weaker pre-existing health infrastructure. The results suggest that rapid, rules-based disaster response can dramatically reduce the human costs of natural disasters.