January 15, 2007

Disastrous Uncertainty: How Government Disaster Policy Undermines Community Rebound

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This Policy Comment looks at the ways in which public policy has had negative unintended consequences on the ability of communities to make informed decisions about sustainable rebuilding after Hurricane Katrina.  Based on fieldwork conducted over four months, the authors explain why social capital and signals generated by market and civil interactions are important to recovery efforts and how policy makers can encourage rather than retard grassroots rebuilding efforts.

In the aftermath of large-scale disasters, policy makers frequently respond by developing and directing top-down recovery plans and launching a variety of expensive and complicated programs to rebuild cities and compensate victims.  This was certainly the case after Hurricane Katrina.

These plans, however, tend to ignore the innate abilities of individuals, communities, and businesses to use a variety of resources and sources of information to guide their decisions about whether and how to rebuild.  These decisions are not made in isolation, but rather depend substantially on the signals sent by similarly situated people.

Recovery efforts guided by the signals that emerge form action on the ground produce faster, more robust, and more sustainable redevelopment than efforts stemming from a politically-produced and centrally-executed recovery plan.  Moreover, large-scale redevelopment programs can overwhelm and obfuscate the signals created locally, stalling and distorting the organic recovery that is crucial to long-term sustainable development.

Public policy can foster an environment which encourages sustainable, organic recovery by:

1. Providing quick, clear, and credible commitments about that goods and services governments will provide and when,

2. Creating in advance alternative regulatory regimes specific for post-disaster environments, and

3. Avoiding policies that distort local economies and hamper civil society rebuilding.

Because policy mistakes can have serious retarding effects on post-disaster rebuilding efforts, policy makers must understand the systemic reasons why government help so often goes awry why private citizens  with a stake in the outcome are best situated to lead their own recovery, and how to craft policy responses in a way that keeps "signal noise" to a minimum.

Citation (Chicago Style):

Chamlee-Wright, Emily and Daniel M. Rothschild. "Disastrous Uncertainty: How Government Disaster Policy Undermines Community Rebound." Mercatus Policy Series, Policy Comment No. 9. Arlington, VA: Mercatus Center at George Mason University, January 2007.