Reason.com

Free Minds & Free Markets

Disasters Should Be Dull

But as long as distant authorities are in charge, that's impossible.

Dull Disasters? How Planning Ahead Will Make a Difference, by Daniel J. Clarke and Stefan Dercon, Oxford University Press, 160 pages, $22.95

Oxford University PressOxford University PressAs you might expect of a volume with the word dull in the title, Dull Disasters? is not a sexy book. The authors, Daniel J. Clarke and Stefan Dercon, are an actuary and an economics professor, respectively. Their thesis is that with better planning and coordination, natural and humanitarian disasters can become less exciting TV viewing and more, well, dull. In a good way.

"Be prepared" is sound and uncontroversial advice, but which people do the preparation matters. The correct dispute, F.A. Hayek wrote, is not "whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally…or is to be divided among many individuals."

Therein lies the tension in Clarke and Dercon's book, and in disaster policy more broadly. They assume that centralizing the planning process is both efficient and possible. Yet many of their examples show people's ingenuity in devising systems tailored to their own needs. Rather than centralizing these examples into one-size-fits-all programs, we should appreciate the flexibility and uniqueness of local solutions.

The heart of Clarke and Dercon's argument is a critique of the "begging bowl"—their term for the system by which government agencies and nongovernmental organizations (NGOs) beg for taxpayer and private dollars after a disaster. This "medieval" approach, they argue, is "too slow" and "leads to a fragmented response."

They have a point. Waiting until a disaster strikes to gather funding and craft an overarching plan means that valuable time is spent pandering for cash rather than rebuilding. As they write, "The way forward is to act before disasters strike, preparing credible plans with rules-based decision-making and early action and held together with sound financial planning agreed beforehand." After a disaster, the relevant policy question should be how rules will be enforced, not what kind of new rules will be put in place.

Agencies and NGOs already plan, of course. But once disasters strike, they tend to cast these plans aside, introducing uncertainty and causing delays. As Clarke and Dercon write, politicians "prefer discretion over rules."

The results are uninspiring. After Hurricane Katrina, for example, Congress appropriated over $100 billion for disaster recovery. If it had bundled the cash into helicopters and dropped it over major population centers, the results might well have been superior to what we saw. Consider Louisiana's dysfunctional Road Home Program. Funds weren't acquired until August 2006, roughly a year after the storm. In July 2007, only about 25 percent of that money had found its way to homeowners, who found themselves in a Byzantine application process that took years to resolve. It wasn't until 2013 that the program got the majority of the dollars out the door.

As the authors note, this is partly a problem of incentives. "Why should a politician invest in a sensible system to reduce risks and enable a quick response to a strong earthquake if the political benefits from such a system are likely to be reaped by that politician's political successor?" they ask. It's a good question, but one that the book leaves largely unanswered.

Instead, it focuses on the patchwork, overlapping, and ad hoc systems (another word might be polycentric) for preparing for and responding to disasters. Such systems, they complain, are limited in scale and lead to redundancies; centralized systems, they suggest, could as effectively serve a larger population.

They argue that centralization can be effectuated through insurance. Clarke and Dercon's chief interest is securing funding to respond to disasters before they occur so that funds can be distributed quickly afterward. That way, they say, time and energy wasted on rattling the begging bowl can be reallocated to humanitarian needs.

Insurance is no doubt important to rebuilding after disasters. But it's no panacea.

In the U.S., there's a division between homeowners insurance that covers hazards (left to markets that are, depending on the state, somewhat to quite robust) and flood insurance (virtually only available through the National Flood Insurance Program). After Hurricane Katrina, some Louisianans were left without funds to begin rebuilding for months as their (private) homeowners insurers and (semi-public) flood insurers debated whether water damage had come from the ground or from the sky. Each insurance provider had an incentive to push the costs of rebuilding onto the other, which only prolonged people's suffering.

Clarke and Dercon also blur the line between voluntary insurance schemes and programs run by the public sector. They cite the mutual aid and burial insurance associations of India, Bangladesh, and Ethiopia as praiseworthy examples of how local knowledge and relatively simple insurance mechanisms can ameliorate negative shocks. These groups do offer critical services, such as the resources needed to follow traditional burial rituals, to individuals who understand the importance of planning ahead. But what is laudable in these systems does not necessarily transfer to international schemes involving dozens of governments, hundreds or thousands of NGOs, and potentially millions of people. Centralizing such systems could ruin everything that is good about them: their flexibility, customization, and effective mechanisms for monitoring participants and enforcing the rules.

Herein lies the central flaw in the authors' thesis. "It is far, far better to have one well-coordinated plan than a number of fragmented plans," they assert. Why? Because of "economies of scale in financing and logistics."

But consider those burial associations. Hundreds if not thousands of them exist around the world. If they are praiseworthy, why not run them as obligatory nationalized insurance schemes? For one, expanding mutual aid from a community into a savings system for the whole nation alters the nature of the beast: Incentives change dramatically, and local knowledge is set aside. Also, it's one thing to have enough funds on hand to quickly help a grieving mother bury her child. It's another to quickly disburse funds to rebuild a major city.

The model also doesn't translate to disaster preparedness, as uncorrelated risks within a given population are different than risks that befall large areas and groups. The social bureaucracies of wealthy western countries have been capable of paying death benefits for decades. Death is clearly defined in law and triggers a rules-based sequence of events, culminating (in the U.S.) with a widow or widower receiving $255 from the Social Security Administration. Compare that with the complicated task of figuring out who has been affected and the extent of their losses after a disaster. As the failures of Katrina recovery highlight, public bureaucracies are severely limited in their ability to manage this task.

Fortunately, decentralization isn't actually an obstacle to overcome. Polycentric decision making is good for recovery.

Photo Credit: Oxford University Press

Stefanie Haeffele-Balch is a senior fellow in the F.A. Hayek Program at the Mercatus Center at George Mason University.

Daniel M. Rothschild is executive director of the Mercatus Center at George Mason University.

Media Contact Reprint Requests

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Adans smith||

    It doesn't help when the government encourages people to build in areas that are prone to big storms ith flood insurance . I many areas of the coast these are second home of fairly wealthy people. I like the Outer Banks,but,many of the homes have been rebuilt a few times on the government [ taxpayers ] dime.

  • C. S. P. Schofield||

    I visited the Outer Banks a couple of times. You could tell the houses that had been built right after really bad storms; they looked like bunkers. The rest mostly looked like they had been designed by somebody with a discount card for Guido's warehouse of mismatched windows.

  • DJF||

    """"Rather than centralizing these examples into one-size-fits-all programs, we should appreciate the flexibility and uniqueness of local solutions."""'

    The most local of solutions is individual solutions. But with individual solutions you will have to accept individual results

    So one family chose the location of their home to be above flooding, built it to withstand hurricane winds, provided themselves with a generator, stocked up on food and water. For them the storm is little more then an inconvience.

    Another family chose a location on a sandy beach barely above normal high tides, don't even have a flashlight, have no food or water in their home, have no idea of where to go if trouble happens and for them its a major disaster

    And soon the second family become a disaster for others since its the others who took care of themselves who end up paying in one way or another for their bad planning

  • Lee Genes||

    +3 Little Pigs

  • pan fried wylie||

    the subject of disasters keeps making me think about that parable, where the one animal stores food for the winter, the other doesn't, then comes begging once he's hungry.

    living in a known tornado area, living below sea-level, living in earthquake zones....that's "winter", baby, be prepared. or be prepared to live off the kindness of others, and see how that turns out for you.

  • pan fried wylie||

    also, what DJF said

  • Lee Genes||

    It's going to be hard keeping the US out of wars when people like this exist.

    The theme of this year's tattoo is "Over There: 100 year of America and its Allies." It will honor the 100th anniversaries of both U.S. entry into World War I and Naval Station Norfolk.

    Robert Dalessandro, chairman of the United States World War I Centennial Commission, spoke about the continued relevancy of the Great War.

    "At the start of the war, the U.S. was an inward nation and a minor power. By the war's end, the U.S. was a creditor and industrial nation, a leading economic power," he said. "World War I changed America dramatically and forever so we are proud the 2017 International Tattoo is a signature event of our centennial."

    It's unfortunate the VIT has taken the position of celebrating participation in a needless war.

  • DJF||

    """By the war's end, the U.S. was a creditor and industrial nation, a leading economic power," """

    It was that before entering the war.

    After entering the war it was deeper in debt and many of its borrowers failed to pay off their debts. And of course there were the 300,000 plus casualties.

    Yeah World War 1 !!!!!!!!!!

  • Lee Genes||

    The ignorance and callous indifference to suffering is astounding.

  • Homple||

    WWI offered a good opportunity for Woodrow Wilson to expand the powers of government. He seen his opportunity and he took it.

  • Adans smith||

    WW1 was a war between empires [ even the French ], the U.S. should have stayed out .

  • Austrian Anarchy||

    What about the Doomsday Clock!?!?!?

    The most scientifically vetted thing in the history of science just unexpectedly moved in the wrong direction and we are going to die in a nuclear inferno, unless we appease the Stalinists who operate the Doomsday Clock!

    You people are too young to remember that when the same thing happened after Reagan was elected and we all died!

  • ||

    "You people are too young to remember..."

    I believe I mentioned that in the comments of the Reason article on the subject.

  • Lee Genes||

    And then there are those of us who don't like to be reminded of our age.

  • Tundra||

    That's what our fucking knees and back are for.

    *creaks*

  • Austrian Anarchy||

    Time traveling plagiarist eh?

  • SchillMcGuffin||

    I saw that "scientifically vetted" claim on a rare recent visit to Facebook. I'd like to see the supporting data, but I guess there are proprietary models involved...

  • Tundra||

    It was not that long ago that disaster preparation was standard practice for anyone living in even a slightly rural area. My son and I were talking recently how screwed we'd be if there were a significant interruption of services.

    But then I remembered my back up plan, and I felt better.

  • ||

    *shuts closet door to hide disaster supplies from Tundra*

    I know what you mean. I have the same plan.

  • Tundra||

    It's an interesting challenge, isn't it? How do you protect yourself? Who do you choose to help?

    I just read this book about a group of people in Manhattan trying to survive a massive cyber attack that shuts everything down. Good book with a lot of these disaster-preparation scenarios. The fact that it is set in the city was particularly interesting.

  • Jerryskids||

    And nobody's going to mention the disaster prepping of the Donner Party? Adapt and overcome, baby.

  • BestUsedCarSales||

    First sign of danger, I got a gun, and I ain't afraid to turn it on myself.

  • ||

    Reading this pissed me off. Katrina seems like yesterday.

    Images of cops and LANG going around offering no assistance but forcibly confiscating firearms really gets me angry. I don't think anyone was held accountable for that.

    Then there's this guy: http://www.breitbart.com/texas.....survivors/

    Watching the ordinary pettiness and corruption of government in the best of times is disheartening. Watching them when the SHTF and they are truly needed it really hits home how useless and stunningly incompetent they are.

  • Lee Genes||

    When Isabel happened back in 2003(?), FEMA showed up to town without generators. My father was selling them and had a line out the door of people waiting patiently to get one. FEMA went to the front of the line, demanded to be sold some immediately and with a government discount. Dad told them to get to the back of the line or fuck off.

  • DJF||

    Most people don't realize that FEMA is mostly a after the fact check issuing agency. They don't rescue anyone, it takes days, weeks, months for them to bring supplies.

    If you are waiting for FEMA to rescue you then you will be waiting a long time

    However if you are waiting for some taxpayer agency to scam out of money then FEMA is good for that

  • ||

    I don't remember who it was, Wal-mart? Sams? A grocery store chain? Maybe it was a bottled water company. Very soon after Katrina...just days....three tractor trailer loads of donated bottled water were stopped from going into the affected areas on orders from FEMA.

  • KWebb||

    The Wal-Mart Home Office is really proud of its Katrina response and has hung photos of trucks lined up on a highway waiting to make deliveries everywhere. At the head of the column is a Louisiana state trooper blocking the road. Every time I see it I wish the lead truck had just plowed through the cop car.

  • Jerryskids||

    The best part of the story is that FEMA had brought in plenty of bottled water and supplies ahead of the disaster, but they stockpiled it inside the disaster zone where nobody could get at it after the storm crippled the city. Walmart was smart enough to set up their distribution center well north of the storm. I wonder why a greedy, heartless corporation would have an incentive to know everything there is to know about effective, efficient distribution while the good-intentioned, kind-hearted folks in government relief don't?

  • ||

    I learned the hard way that generators are good to have but only for a very few uses. They use a huge amount of gasoline if you are trying to run more than one or two lights. If you try to run your house on them you are going to run out of gas fast. Thats when you discover there is no more gas to be had. In a flood situation the reservoir tanks at the stations are full of water. The gasoline has been floated out.

  • Lee Genes||

    Fuel is always the issue. We were in the position of being able to fill the generators as part of the purchase as we had arrangements with a fuel distribution company, probably illegal since the state locks down on all fuel shipments during emergencies.

    Don't ask, don't tell.

  • Jerryskids||

    If you're doing serious prep, you're going to want a whole-house back-up that runs on LP. My sister and her husband bought a piece of land out in the middle of nowhere for their retirement that had a natural gas well on it and part of the deal is that they get free gas plus royalties so they installed a gas pack when they built their cabin that supplies all their heating and hot water and electricity. It was expensive to install, but they're off the grid and there's no grid out in the middle of nowhere even if they didn't want to be off the grid.

    I keep a couple little generators to run the freezers and a couple little LP space heaters and a couple hand-cranked camping lanterns but we only have to deal with the occasional 12-24 hour power outage where I'm at.

  • SQRLSY One||

    To be fair, there are ***SOME*** few disaster-prep categories where "everyone does their small little independent things" doesn't work… "Market failure"… Like digging giant drainage ditches and/or retention ponds (lakes) to get floodwaters away from buildings. Not much choice other than to have "eminent domain" and some sort of publicly funded action, as far as I can see…

    Then there's funding for staving off the next asteroid impact. How do you free-market THAT? If Bill Gates spends $60,000,000,000 of his stash to fend off the next planet-killer asteroid, how does he collect $100 from everyone on the planet?

  • Lee Genes||

    how does he collect $100 from everyone on the planet?

    I thought he already did that.

  • C. S. P. Schofield||

    To be really effective the recovery from Katrina should have begun with a bullet to the back of Ray Nagin's head.

  • Scarecrow Repair & Chippering||

    Imagine, say, a state law that creates professional licensing reciprocity in the immediate aftermath of a natural disaster, so that out-of-state contractors, plumbers, electricians, doctors, nurses, and other specialists can legally practice their trades in the affected area. Suspending such requirements would do wonders to speed recovery and reduce uncertainty.

    Aye, there's the rub, in't. If the pols did that, pretty soon people would begin to think and ponder and ask why the window couldn't be extended just a little, and a little more, and then why not always? And the pols would never just let them furriners work without hassle, they'd add rules stipulating that all repairs must be logged and recorded in triplicate and scheduled for local inspections within 90 days, of course with extra fees.

    As usual, government is the source of problems and simply gets in the way with no useful consequences except for the hiring of cronies.

  • SchillMcGuffin||

    I don't think that a lot of individuals working independently and organizing voluntarily to survive and recover from a crisis would be boring. What it would lack is organized photo ops and dramatic statements about how the leaders are restoring order. That's why there'd be less media hype.

    Of course, disaster recovery is probably among the more legitimate reasons for government to exist, however that function is abused in practice. Of all the issues about which libertarians nurture wishful thinking about the public wising up and rolling-back government power, this one may be the most unlikely.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online