Association for Public Policy Analysis & Management

Panel: The Role of the Public Sector in Building Economic Resilience

(National Security and Homeland Security)

This session will focus on empirical analysis and evidence-based research that informs the methods and tools available to the public sector in building and enhancing economic resilience to disasters. While research on resilience has grown rapidly in numerous fields, in most cases, public policy implications are at best an afterthought. Here, we view public sector actions as critically important at all levels, from the micro (enterprise/organization) to the macro (community/region). Such analysis informs the use of those resources at all levels of the economy and informs both efficient pre-event planning as well as the efficient post-event use of remaining resources in the face of unforeseen calamity.

Public sector actors can play a critical role in building and enhancing economic resilience—from high levels of involvement (e.g., direct financial support, critical infrastructure investment) to less involvement (e.g., providing risk information, incentivizing resilience planning). On the other hand, firms and organizations are often more aware of their own resilience capacity than public sector actors, and the appropriate role of government may be best if a more limited approach is taken. In this case, public sector actors might best step back and allow businesses to prepare and respond on their own without interference or duplication of efforts.

The papers in this session will provide empirical analyses that can inform the appropriate role of the public sector in building and enhancing economic resilience at both the micro and macro levels. The paper by Hallegatte focuses on quantifying socioeconomic resilience to identify public policy priorities. Because natural disasters have large economic implications, their severity is usually measured by asset losses. His paper will move beyond this metric and explore how natural disasters affect human well-being, by proposing an estimate of “socio-economic resilience” in 120 countries. It will inform policy priorities such as expanding financial inclusion, contingent finance and reserve funds, and universal access to early warning systems. The paper by Dormady, Rose and Roa-Henriquez also focuses on quantifying economic resilience, specifically measuring the cost-effectiveness of post-disaster actions. Their U.S. Department of Homeland Security-funded research reports on a survey of firms affected by Superstorm Sandy, finding that firms observed an average return of over $18 for every dollar spent on resilience actions.  The paper by Helgeson and Colucci-Rios at NIST also reports on post-disaster survey results, for Hurricane Maria. Their paper informs why understanding losses caused by supply chain and business continuity interruptions are key to loss avoidance estimates, because they can guide a region’s future resilience planning. Relatedly, the paper by Greenbaum, Dormady and Young reports on a series of controlled human-subjects experiments on the decision of firms to invest in resilience to mitigate supply-chain disruptions, and their willingness to pay for advisory information to improve resilience planning investments, specifically strategic inventories.

This multidisciplinary panel includes both academics and public-sector practitioners and provides evidence-based assessments of available policy tools that can improve economic resilience, of vital importance to national and homeland security.