Who Plans Best for Natural Disasters?

Who Plans Best for Natural Disasters?:

Private-sector firms are very good at mobilizing resources not only because they do it every day–and not just when a disaster rolls around–but also because they exist in an institutional environment in which prices, profits, and losses provide both the knowledge and incentives to do it well. One reason Walmart was so effective during Katrina is that it has its own in-house weather forecasters, as well as private forecasters under contract, to keep up to date. In fact Walmart’s forecasters predicted Katrina’s strengthening to a Category 5 before the National Weather Service did.

The private sector can move supplies quickly to where they need to be because it can effectively use local and decentralized knowledge. The Coast Guard succeeded for similar reason because it has long-standing relationships with local boat owners who could be called on during the disaster. Both the Coast Guard and Walmart give a great deal of discretion to employees on the spot, such as the captain of a boat or a store manager. Several of the most community-minded things Walmart stores did during Katrina were on the initiative of managers and assistant managers who followed the CEO’s call to “above all, do the right thing.”

So when the next storm threatens and you see the interviews with local political officials, you might ask why they never interview distribution managers at Walmart or Home Depot. The answer, I think, is that, unlike the politicians, who always seem to have the time to do interviews, leaders in the private sector are actually working on disaster-response plans and making sure resources are getting where they need to go. When you really engage in disaster preparedness, you don’t have time to blow your own horn on TV. You have lives to save.