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Richard Sylves introduced the session and offered the following three questions as a basis for discussion: How should economic factors be introduced into the work of disaster management? How is the economic performance of disaster agencies to be measured beyond event-by-event circumstances? How is disaster mitigation emergency work to be organized in a way that permits evaluation of damage avoidance and cost-effectiveness?
George Horwich discussed the role of the private sector in disaster management and how it may serve as a basis for determining what may be a better role for the public sector. The vast majority of losses in natural disasters involve private property on private land and, in such cases, we should expect market forces to serve as the proper organizational structure by providing incentives through competition. Furthermore, we should expect that the role of the public sector should recede with income growth given that household demand for safety increases with per-capita income. There are aspects of natural hazards that are not handled well by market forces. Given these shortcomings of the market, there is a role for public sector, but that role must be determined with the strengths of the private sector in mind. Public entities should not interfere with commerce and should not act to reinvent the community. What should the government do? Horwich suggests government should maintain competition, keep lifeline industries competitive by not granting monopoly power, and avoid doing what the private sector already does well.
Sandra Sutphen argued that the private market does not sufficiently deal with the problems associated with natural hazards and provided two anecdotes illustrating the effectiveness of public entities versus private entities. The first example involved a real estate development constructed in a manner that created safety problems where none previously existed. In this case, the private sector failed to adequately protect the households moving into the new development. The second example involved a community's implementation of some simple, common sense mitigation given early warnings about the adverse affects of El Niņo. The community experienced only limited losses and no loss of life. These examples suggest that markets will not always perform in the best interest of the community and that simple, inexpensive mitigation on the part of the public sector is most effective.
Arrietta Chakos discussed an established community program in Berkeley, California, designed to break the cycle of "disaster-to-disaster" policy. Berkeley is subject to a variety of natural hazards including earthquakes, creek flooding, and landslides. The program serves to educate the residents and community leaders with regard to the risks of living in Berkeley, to generate the support necessary to undertake mitigation of public buildings, and to implement incentive programs aimed at improving mitigation and risk-reduction activities by households. The program has been able to find innovative ways to finance projects through both bond financing and appealing to federal funding agencies.
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Index of 1998 Session Summaries