Want Disaster Relief? Bypass the Feds

Thursday, November 30, 2017

The time-consuming and tedious procedures to access federal aid make a mockery of the objective, as they get in the way of time-sensitive actions. This important finding appears in the summer edition of the Eastern Economic Journal: "Navigating Disaster: An Empirical Study of Federal Assistance Following Hurricane Sandy."

Even though the natural disaster reviewed took place in 2012, nothing has to come to pass to alleviate the problem. In fact, Hurricanes Irma and Harvey caused at least $90 billion in damages and only further highlighted the folly of relying on federal officials to resolve the damage in a timely and appropriate manner.

As people beg to the federal leviathan for assistance, they can look forward to waiting on the call-in line for hours on end, before getting to a representative from the Federal Emergency Management Agency (FEMA). The Boston Globe, for example, reports that the feds are overwhelmed, and Houston residents have waited weeks or often more than a month for inspections. Then the actual payments have taken longer again.

To rub salt into the wound, the research by Laura Grube, Rosemarie Fike, and Virgil Storr found that immigrants and those with low educational attainment struggled to jump through the hoops. Whether that was on account of cultural confusion or literacy difficulties, it meant the aid did not go the those most in need, and isn't that kind of the point?

A natural conclusion might be to simplify these programs and attempt to cut red tape. While that could potentially generate a marginal improvement, it would be throwing good money after bad. When a market participant fails, it goes out of business and superior competitors take its place. In the same way, we would best look beyond status-quo channels.

The question then is, what has worked in the aftermath of these natural disasters? A 2015 book by one of the study authors, Virgil Storr, examines this in detail: Community Revival in the Wake of Disaster. He points out that competitive service providers not only promote social change with innovative entrepreneurship, they also do their best to walk aid recipients through the application process. In other words, the aid money that finally gets to people also goes to professional application facilitators.

His main assertion is that these sensitive, post-disaster periods are precisely when people need the space to innovate and engage in startup enterprises, without tripping up over paperwork.

With what space they have, entrepreneurs have already joined together in efforts after the latest hurricanes. In Houston, for example, they launched entrepreneursforhouston.org, to receive donations from outside the city, and the tech community, in particular, have contributed to other relief projects.

While there may be constituent pressure for state-sponsored disaster relief, good intentions do not translate to good outcomes. Both research and experience encourage prudence — not taking on or inflating expectations of the federal government as savior — and ensuring that there is space for private parties to get on with the acute need for rescue and rebuilding activities.

Image: destruction in Marathon, Florida, after Hurricane Irma (US Customs and Border Protection).

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Paz Gómez

Paz Gómez is a contributor to the AIER blog and a policy analyst with Antigua Report. She is also the cofounder and academic coordinator of Libre Razón, a think tank in Quito, Ecuador. Follow @PazenLibertad.