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Using data from the Damage Assessment Reports from the Civil Defence, the current study investigates the relationship between the damage caused by natural disasters and local development at the municipality level in Ceará state, Brazil. The results show that a better urban and water supply infrastructure, a lower population density, and a higher proportion of own revenues relative to total revenues are associated with smaller disaster damage. However, economic development in terms of GDP per capita exhibits a convex relationship with the impact of natural disasters across municipalities, reflecting the potential decreasing returns of preventive investments due to the highly hazardous environment that involves municipalities. [ABSTRACT FROM AUTHOR]