HR: 14:45h
AN: U53B-04    [Abstracts]
TI: The Identification of Filters and Interdependencies for Effective Resource Allocation: Coupling the Mitigation of Natural Hazards to Economic Development.
AU: * Agar, S M
EM: susan.m.agar@exxonmobil.com
AF: ExxonMobil Upstream Research Company, P.O. Box 2189 GW3 966A, Houston, TX 77252 United States
AU: Kunreuther, H
EM: kunreuther@wharton.upenn.edu
AF: The Wharton School, University of Pennsylvania, Philadelphia, PA 19104 United States
AB: Policy formulation for the mitigation and management of risks posed by natural hazards requires that governments confront difficult decisions for resource allocation and be able to justify their spending. Governments also need to recognize when spending offers little improvement and the circumstances in which relatively small amounts of spending can make substantial differences. Because natural hazards can have detrimental impacts on local and regional economies, patterns of economic development can also be affected by spending decisions for disaster mitigation. This paper argues that by mapping interdependencies among physical, social and economic factors, governments can improve resource allocation to mitigate the risks of natural hazards while improving economic development on local and regional scales. Case studies of natural hazards in Turkey have been used to explore specific "filters" that act to modify short- and long-term outcomes. Pre-event filters can prevent an event from becoming a natural disaster or change a routine event into a disaster. Post-event filters affect both short and long-term recovery and development. Some filters cannot be easily modified by spending (e.g., rural-urban migration) but others (e.g., land-use practices) provide realistic spending targets. Net social benefits derived from spending, however, will also depend on the ways by which filters are linked, or so-called "interdependencies". A single weak link in an interdependent system, such as a power grid, can trigger a cascade of failures. Similarly, weak links in social and commercial networks can send waves of disruption through communities. Conversely, by understanding the positive impacts of interdependencies, spending can be targeted to maximize net social benefits while mitigating risks and improving economic development. Detailed information on public spending was not available for this study but case studies illustrate how networks of interdependent filters can modify social benefits and costs. For example, spending after the 1992 Erzincan earthquake targeted local businesses but limited alternative employment, labor losses and diminished local markets all contributed to economic stagnation. Spending after the 1995 Dinar earthquake provided rent subsidies, supporting a major exodus from the town. Consequently many local people were excluded from reconstruction decisions and benefits offered by reconstruction funds. After the 1999 Marmara earthquakes, a 3-year economic decline in Yalova illustrates the vulnerability of local economic stability to weak regulation enforcement by a few agents. A resource allocation framework indicates that government-community relations, lack of economic diversification, beliefs, and compensation are weak links for effective spending. Stronger positive benefits could be achieved through spending to target land-use regulation enforcement, labor losses, time-critical needs of small businesses, and infrastructure. While the impacts of the Marmara earthquakes were devastating, strong commercial networks and international interests helped to re-establish the regional economy. Interdependencies may have helped to drive a recovery. Smaller events in eastern Turkey, however, can wipe out entire communities and can have long-lasting impacts on economic development. These differences may accelerate rural to urban migration and perpetuate regional economic divergence in the country. 1: Research performed in the Wharton MBA Program, Univ. of Pennsylvania.
DE: 1880 Water management (6334)
DE: 6304 Benefit-cost analysis
DE: 6309 Decision making under uncertainty
SC: Union [U]
MN: Fall Meeting 2005