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Reason Foundation

Rebuilding After Katrina

Policy Strategies for Recovery

Adrian Moore, Lisa Snell and Geoffrey Segal
October 1, 2005

Significant investment and time will be needed to rebuild infrastructure and key services in the wake of Hurricane Katrina and Rita. There is so much devastation and need; a traditional response will not be adequate. Rather policy makers will need to employ innovative strategies to encourage public-private partnerships and introduce private capital to get Mississippi up and running again quickly.

Perhaps one of the best responses to natural disasters was the response from California Gov. Pete Wilson to the Northridge earthquake in Los Angeles in 1994. One of his administrations finest achievements was the reconstruction of Interstate 10—a project that was estimated to take more than two years was completed in two months and two days after Wilson invoked emergency powers.

Indeed, in a recent Wall Street Journal editorial Gov. Pete Wilson offered some sage advice to governors on how to cope with reconstruction needs. In California, Wilson used the broad emergency powers conferred to him to dismiss onerous rules and regulations, in effect bypassing procedural hurdles to get construction up and moving. Second, the governor used incentives to get contractors to accelerate their performance. Contractors who submitted bids had to agree not only to the cost, but the completion date as well. Furthermore, the contract called for stiff fines for every day the contractor was late, and equally large bonuses for early delivery. As the governor notes, "the winning bidder, C.C. Myers, Inc., put on three shifts that worked 24/7…Myers made more on the bonus than they did on the bid."[1] Wilson adds that the additional investment was well worth it given the restoration of critical infrastructure years before it otherwise would have been completed.

The devastation of Hurricane Katrina will be felt for years to come. Throughout history the free market has proved itself to be a more vigorous builder of economies and infrastructure than government. Harnessing that vigor can help rebuild Mississippi, and give governments an opportunity to shed unproductive assets while helping to jumpstart the recovery process.

Some recommendations that will help capitalize on these opportunities:


Endnotes

[1] Pete Wilson, "The California Way," The Wall Street Journal, September 13, 2005.


Adrian Moore is Vice President, Policy

Lisa Snell is Director of Education


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