Association for Public Policy Analysis & Management

Panel: Coping with Natural Disasters in an Intergovernmental Policy Framework: Challenges and Perspectives

(Natural Resource Security, Energy and Environmental Policy)

Natural disasters cause tremendous human and economic losses, and pose significant challenges for governments at all levels. How to effectively cope with natural disasters in terms of mitigation, response and recovery is an important question for policy makers as well as researchers. This issue has drawn increased attention recently as part of a larger emerging interest in climate adaptation, as scientists warn that weather-related extreme events (e.g., floods, droughts, and tropical cycles) may become more frequent and intense as a result of climate change. While the impacts of natural disasters are local and depend on local responses, large-scale catastrophes often necessitate the involvement of higher levels of government. This panel focuses on the implications of the U.S. intergovernmental policy system on natural hazard mitigation. It consists of four individual papers which examine the economic impacts of natural disasters and the effectiveness of federal disaster policy at the subnational level. The first paper empirically estimates the fiscal impacts of natural disasters on state government by linking state-level public expenditure and revenues with disaster damage and weather data. This study is among the handful research attempts to evaluate the fiscal costs of natural disasters, and cost sharing between federal and subnational governments, with additional policy implications on ensuring fiscal sustainability in the face of climate change. The second paper focuses on the disaster recovery policy by examining the effect of the subsidized disaster loans available through the Small Business Administration on small business survivals in areas affected by floods. Given the significant contribution of small businesses in the employment nationwide, this research provides important insights into the effectiveness of federal recovery policy in reviving local economy. The third paper examines the challenges concerning reformation of the National Flood Insurance Program (NFIP) through the lens of path dependence, by highlighting the mismatch between the subjective perception of risk and actual climate risks. The fourth paper is in the spirit of the third paper and examines the effects of the Federal Emergency Management Agency (FEMA) designated flood zones and variation in flood return period within classified flood zones on property values in Galveston County, Texas. This research provides insights into how to appropriately evaluate flooding risks and incorporate them into the design of flood mitigation policy, with important implications on the current debate on the NFIP reform. All the four papers in this panel are linked by a common theme related to national disaster policy and its implications for states and local communities in different contexts. They not only contribute to a better understanding of the distribution of the costs of natural disasters, but also provide important lessons on disaster mitigation and recovery policy in a federalism state.