The state carries the main responsibility to protect its citizens. Reducing disaster risk and keeping populations safe from natural hazards has become a new priority for states. At the same time, governments around the world struggle with implementing disaster risk reduction (DRR) policy. Yet, the determinants of successful DRR are not clear. In order to better understand the role of state capacity in explaining the varying levels of DRR implementation, this paper investigates the relationship between state capacity, disaster mortality and disaster losses. A linear regression analysis on 191 countries shows that the more effective a government (high quality of public services and the public policy process), the fewer people die due to disasters. Thus, higher state capacity results in lower disaster mortality. However, there is also evidence that higher state capacity is associated with higher economic disaster losses. Hence, with increasing state capacity countries move across a threshold from disaster mortality to disaster losses: countries with low capacities experience high numbers of disaster deaths, while countries with high capacities experience high disaster losses. Moreover, this paper highlights other influential variables (e.g. level of income, access to goods and services in rural areas, level of decentralisation), which affect both disaster mortality and disaster losses. This paper seeks to contribute to a better understanding of state capacity.