Institutions, Incentives, and Disaster Relief : The Case of the Federal Emergency Management Agency Following Hurricane Katrina

The actions the U.S. Federal Emergency Management Agency in the months following Hurricane Katrina are critiqued, with an emphasis on how private-sector responses would have differed. We conclude that a large and bureaucratized response to disasters hinders economic calculation, incentive structure, and property rights institutions, all of which are crucial for rapid disaster response, the relief of human suffering, and the promotion of an efficient allocation of resources. The role of public-sector emergency management responses to disasters in general is questioned