Hayek and the Hurricane


Mercatus has published an interesting paper by Steven Horwitz on disaster relief during Hurricane Katrina. Here's his basic thesis:

While the major media and political actors rightly focused on the failures of FEMA, the major government agency responsible for disaster relief, the successes of the private sector and of one particular government agency, the U.S. Coast Guard, have been much less publicized. Their effective responses deserve greater consideration as we seek to improve disaster relief and recovery policies….

Why were big-box stores like Wal-Mart and one particular government agency able to respond so effectively when other organizations were not? In this Policy Comment, I argue that, contrary to the conventional wisdom, the incentives facing private-sector organizations actually lead them to outperform public agencies in many disaster relief tasks. Furthermore, where a government response is deemed necessary, agencies with more decentralized structures will perform better because they are able to tap into local knowledge and conditions.

You can download the whole thing here. For some of reason's responses to Katrina, go here, here, and here.