Building Back Worse

It's sometimes hypothesized that after a natural disaster, populations "Build Back Better," meaning that the reconstruction of damaged infrastructure leaves the population better off after the disaster than they were before it struck.  There is some economic logic to this hypothesis, since we know that populations don't always update expensive capital investments when they should.  If capital is outdated, then an exogenous shock that motivates the population to replace the old capital with new capital might end up increasing the economy's output in the long-run.  Many of us are familiar with the example of a cell phone that is old and frustrating, but we don't feel like its worth replacing until we drop it in the pool by mistake -- and then find that upgrading to the latest smartphone makes us much more productive.

Politicians in the US, it seems, are required to tell the local population that they will "build back better" after a disaster strikes.  After Hurricane Sandy, we heard a lot of leaders talking about how the tri-state area will be stronger and better than it ever was, probably in part because nobody wants to hear otherwise and in part because this kind of logic is important for obtaining reconstruction funding.  Healy and Malhotra have a nice article (here) demonstrating that obtaining this kind of funding for reconstruction is important for an incumbent's re-election (recall: Hurricane Sandy -> Federal relief funding -> NJ Governor Christie's endorsement -> Obama earns votes in reelection).  And just before the Superbowl, I saw this video about the Superdome's post-Katrina reconstruction, which is not shy about endorsing the BBB hypothesis.

Importantly, though, the BBB hypothesis still remains a hypothesis, and there is no robust empirical evidence that populations actually do build back better, in aggregate, after catastrophic events. To remind that we shouldn't take the anecdotes and political rhetoric above too seriously, Amir Jina points us to an interesting IRIN report that suggests populations affected by Typhoon Bopha are building back worse:

Typhoon Bopha/Pablo was the sixteenth to hit the archipelago in 2012, but the deadliest worldwide that year, claiming, thus far, close to 1,100 lives.  

Emergency housing kits - valued at some US$1,000 each and donated by the UK-based NGO Shelter Box, and containing emergency tents, blankets and basic tools - lie unopened in front of a number of homes. “We don’t need those. Residents need something sturdier to get us through the rains,” said Sulag.  

Local government officials sent 160 of the 215 requested corrugated iron sheets to repair roofing, but Sulag said he did not want to distribute them until there was at least one sheet per family, to prevent accusations of preferential treatment.  

Meanwhile, residents were patching together rooftops from fallen coconut timber, and blue tarpaulins (donated). Aid groups and the government estimate 95 percent of families recovering from the typhoon continue living in the remains of their houses.  

“What we are seeing is people building back worse with salvaged materials,” said Bamforth.  

As of 28 January the Department of Social Welfare and Development (DSWD) calculated that the typhoon had completely destroyed nearly 75,000 homes and partially damaged another 123,000. 

The article also points towards the difficulty governments have in using risk-information to protect populations from environmental hazards.  The US gov't has had difficulty updating risk maps for the National Flood Insurance Program, and we've been hypothesizing for some time that declaring a location high risk just lowers the price of land in that location, increasing the incentive for low-income groups to move in and occupy the high risk locations.

The government’s Mines and Geosciences Bureau is conducting geohazard risk assessments in affected provinces, colour coding sites to indicate high, medium or low risk to flooding and landslides. The government is interpreting high-risk areas as “no-build” zones, said DSWD’s housing focal point for typhoon-affected areas, Elena Labrador. “The government will not tolerate people living in no-build zones,” she told IRIN.  

When asked what the options were for people living in high-risk areas, she said they are encouraged to move to new sites, which are now being finalized, or will be given materials to construct in an area they choose, which must be classified as safe - a definition still evolving based on ongoing risk assessments.  

Construction at relocation sites is expected to begin by March in Davao Oriental, she said, following a meeting with the province’s governor on 8 February. She confirmed that families living in any no-build zone do not qualify for the government’s emergency shelter assistance of $245 (10,000 pesos).  

Bamforth said agencies working on housing advocate relocation only as a last resort, due to problems that may arise from separating people from their farms and livelihoods. Instead, aid workers are calling for, when possible, measures to lessen risk to natural hazards in areas labelled high-risk. 

These various dynamics, which we don't understand very well, are topics ripe for research... if there are any grad students reading this...