U.S. News and World Report's Debate Club asked, "Should FEMA's responsibilities be handed over to the states?" Steve Horwitz provided the following response:
The mistakes made by FEMA during its response to Hurricane Katrina are the stuff of legend. It failed to get to the worst hit areas for days, it was unprepared for the scope of the disaster, and many of the trailers it provided for temporary housing were later found to be toxic. It is hard to identify anything it did right in New Orleans and the Gulf Coast. Local politicians were merciless in their criticisms, even to the point of—rightly—praising the job done by Walmart in getting supplies to the New Orleans area and crediting Walmart's response with preventing looting and other problems in their towns.
FEMA's failures—and there have been other less dramatic ones since—are largely due to the inability of the federal government to acquire the local knowledge needed for effective disaster response and relief. We have learned from Katrina that even a large scale disaster is best handled by people who know the residents and local culture in ways that allow them to tailor their responses to the needs of the population.
The one effective federal government agency during Katrina was the Coast Guard, and that was because they have a more decentralized structure that allowed them to create working relationships with community members on the coast. Similarly, the reason for Walmart's successful disaster response is that in addition to their immense skill at moving resources, they have detailed data on what different markets need in the aftermath of disasters. This local knowledge and connections are what FEMA lacks, but are more likely to be found at the state and local level.
Decentralizing disaster relief as much as possible would have two other salutary effects. First, it would de-politicize federal declarations of disaster, as evidence indicates a strong correlation between such declarations and the seniority and connections of members of Congress from those areas. Second, it would allow local authorities to work closely with both community organizations and other nonprofits, as well as the private sector to create disaster relief plans that are appropriate to their specific areas.