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Written Testimony on Rebuilding New Orleans after Hurricane Katrina Submitted to the Committee on Oversight and Government Reform

Emily Chamlee-Wright, Daniel Rothschild, Mario Villarreal

June 26, 2007

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Highlights

The Issue

Some 22 months after Hurricane Katrina, communities along the coast are in various states of rebuilding. Some are largely rebuilt, while others appear to have made little progress. The Mercatus Center has undertaken a five-year study to learn what is working in Gulf Coast reconstruction. 

Our Findings:

• Despite the promise of $110 billion in federal funds, the recovery process remains slow, and in some communities, stalled altogether. However, the solution is not additional funding to government programs, because these programs, at all levels of government, are creating confusion by failing to articulate what services and resources will be provided and failing to deliver on promise that have been made.
• The signal noise created by the failings of these government programs is interfering with the positive signals that come from community members are they reopen their businesses, rebuild their homes, and resume church services and other social organizations. A result of confusion created by poorly performing bureaucracies, this signal noise is interfering with the signals necessary for decision making by individuals, as they determine whether and how to rebuild their lives along the US Gulf Coast.
• In the course of our research, we have identified four key strategies by which people are employing social capital to produce positive signals that are guiding community recovery. 1) Mutual assistance, or the exchange of labor, shelter, child care services, tools, and expertise. 2) Charitable assistance. 3) Commercial cooperation, or the creation of jobs and provision of materials that are vital to any community. 4) "Build it and they will come" strategy, meaning the provision of key community resources whose presences encourages residents to return to their community.

Our Recommendations:

• What people need and want most are quick, clear, and credible commitments from governments at all levels about what will be provided and when.
• Policy makers need to help communities by respecting private property, enforcing the rule of law, and ensuring that reasonable and appropriate commitments already made will be fulfilled.
• In order to make decisions, residents need clear and credible information. Credibility requires follow-through, oversight, and making only those commitments which are realistic and achievable. Commitments that are later reneged upon only serve to hamper recovery efforts; it is much more important to fulfill existing promises than make new ones.