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Using Building Regulations to Lower Risks from Disastersand Strengthen Private Sector Resilience Gina Cardenas and Giovanni Biasiucci*U anticipate, prepare for, recover, and learn from natural shocks. This also helps firms reduce disruptionsto their operations. Yet building regulations alone are not enough. Accessible public services (such as digitalplatforms, hazard mapping, and simplified permitting processes) are essential enablers that lower the cost ofcompliance with regulations, encourage adherence, and help make buildings safer and more resilient. Together,sound and effectively enforced regulations and public service delivery foster a private sector and a businessenvironment that is more resilient to disasters—which, in turn, promotes long-term, sustainable economicgrowth. The Brief emphasizes that building regulations are not just a preventive measure but a vital adaptationstrategy that helps economies become disaster-ready and also more attractive to investors.Public Disclosure Authorized Building resilience for a competitive privatesector disaster-proneand rapidly urbanizing regions likeSub-Saharan Africa, Latin America and the Caribbean, andEast Asia and Pacific (figure 1). The increasing frequency and intensity of natural disastersand weather events pose significant risks to economiesworldwide (IPCC 2023), with far-reaching consequences forbusiness growth, investment, and job creation. Over the pastdecade, both high- and middle-income economies haveexperienced an estimated US$1.5 trillion in economic lossesdue to storms, floods, and other natural hazards. IndividualPublic Disclosure Authorized Evidence from the 2011 Great East Japan Earthquake(GEJE) illustrates this pattern clearly. A study of 1,300manufacturing firms found that physical damage to officebuildings was the primary source of disruption to theiroperations (Chujyo, Fujii, and Ishikawa 2013). This examplehighlights a wider trend: disasters often reveal weak spots ininfrastructure and regulations—but they can also prompt Amajor driver of these losses is the damage toinfrastructureand business capital,such as buildings,equipment, and inventory. This damage impairs businessoperations, supply chains (Dai and Tang 2024), investmentreturns (OECD 2014), business survival rates (Basker andMiranda2018;Zaveri,Gatti,and Islam 2024),andproductivity (Goicoechea and Lang 2023; Grover and Kahn2024; Jones et al. 2024). About 10 percent of firms aroundthe world reported damage to physical assets from extremePublic Disclosure Authorized The case of Japan exemplifies this approach (box 1). Beingone of the world’s most disaster-prone countries has notprevented Japan from maintaining economic stability andsupporting private sector growth. This is largely attributed tocontinuous building regulatory upgrades anchored in adeeply institutionalized disaster risk management system,long-standing commitments to resilience to seismic shocks,andstrong coordination between national and local Figure 1 Box 1 Japan’s long history of dealing with natural disasters––including 185 major events between 1995 and 2018 (Japan,Cabinet Office 2018)––has shaped an integrated disaster risk management system that ties building and infrastructureresilience directly to its competitiveness agenda, ensuring effective coordination between national and local governments(Kechichian, Takemoto, and Shin 2020; World Bank 2018a). Major disasters such as the 1923 Great Kantō earthquake, the 1995 Kobe earthquake, and the 2011 Great East JapanEarthquake (GEJE) have served as turning points for regulatory and policy innovation, significantly strengthening thepreparedness of Japan’s private sector. Each event prompted targeted reforms. For instance, the 1923 earthquake led tothe world’s first seismic clause in an Urban Building Law; the 1968–78 earthquake sequence resulted in the 1981 NewAnti-Seismic Design Standard; and the aftermath of the 2011 GEJE brought new measures such as designs to buildcoastal infrastructure on two levels to enhance protection against tsunamis and storm surges, and mandatoryseismic-safety disclosures for large private buildings. The 2025 revision goes further, requiring all new constructions and Effective enforcement has been central to this effort. A 1998 revision of the Building Standard Law empoweredcertified private agencies to conduct plan checks and inspections, accelerating compliance while maintaining highstandards (World Bank and GFDRR 2018). These reforms have been especially effective in coastal areas that generate more than half of Japan’s economic output (World Bank 2020; OECD 2005). Surveys conducted after the GEJE by theBuilding Research Institute found that base-isolated buildings in Miyagi Prefecture, which use shock-absorbing systemsbetween the building and its foundation to absorb earthquake shocks, for example, greatly reduced lateral motion andavoided structural damage (Ranghieri and Ishiwatari 2014). Japan complements regulation with