Essay Helping Disaster Victims Identification

Jan Bikker*

Abstract

The digital age as we know it nowadays has not only transformed the way we communicate, bond and form relationships with each other, but has also created a digital world in which we are no longer anonymous any more. The fast growth and advances in digital technology and on-line services have left many areas of research still unexplored, particularly related to post-mortem privacy following a disaster. In the immediate aftermath of a disaster, unmoderated footage and photos of the scene and/or deceased may be circulated across the globe before even the emergency services or media have reached the site. It is now easier than ever to learn about the victims and their personal lives due to advances in handheld mobile technology combined with ease-of-access to on-line social networking services (SNS) and micro-blogging technology. Although those advances may be used by next-of-kin actively searching for their missing relatives, they can also easily be exploited by trollers, scammers and the media.  The paper’s aim is to raise of awareness of post-mortem privacy-related themes associated with disasters and in particular the issues affecting the deceased and needs of the surviving next-of-kin. The author’s field of expertise is in the identification of victims of disasters, and as such the issues of post-mortem privacy raised here will not be discussed and analysed from a purely legal perspective, although reference to legislation will be made where relevant. Rather, this paper is intended to provide an in-sight into privacy themes relating to the interests of victims experienced in global disasters, whether survivors, the deceased or next-of-kin.

Cite as: J Bikker, “Disaster Victim Identification in the Information Age: The Use Of Personal Data, Post-Mortem Privacy and the Rights of the Victim’s Relatives “, (2013) 10:1 SCRIPTed 57 http://script-ed.org/?p=838

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DOI: 10.2966/scrip.090312.57

© Jan Bikker 2013.

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 2.5 UK: Scotland License.

1. Introduction

It is recognised that each disaster is different from another in scale and variety and, as such, a major disaster is an episode in which the number of fatalities is in excess of that which can be dealt with using the normal mortuary facilities[1] often creating challenges and problems mainly of a humanitarian nature. In the aftermath of a disaster, all too often interests of persons affected by natural disasters are insufficiently taken into account, particularly with regards to privacy issues. In this context it has been noted that ‘ordinary individual lives can be mercilessly exposed to the glaring spotlight of unwanted publicity’[2] as ‘if the dead were celebrities’[3]. Following a disaster, it is now easier than ever to learn about the victims and their personal lives. An authorised user of Facebook will be able to obtain information about a person without having to make an explicit effort to communicate with him/her.  Nor do they need to share a personal relationship with each other[4]. Social media are playing an increasingly important role in disasters, not only for reporting or alerting purposes, but also as a means of tracing missing persons in recent disasters. Micro-blogging sites such as Twitter and Social Networking Services like Facebook are not only used to communicate with lost relatives and share missing person information but may also be used to share images of the deceased in an attempt to identify them.

2. Post-mortem Relational Privacy:  a Fine Line between Privacy, Decency and ‘the Right to Know’

Disasters often attract widespread media attention. The increasing use of Internet and, subsequently, social networking and micro-blogging sites, has changed the way information and news are distributed. In the immediate aftermath of a disaster, un-moderated visual material taken by bystanders and status updates may be circulated across the globe before even the emergency services or the media have reached the site; the bystander becomes in many ways the journalist. Death, economic loss, human suffering, and social disruption are the standard themes in the media’s portrayal of disaster[5]. Large natural disasters may have a serious impact on local communities and survivors due to loss of relatives, their homes, possessions, livelihoods, unemployment, the social issues of displacement and breakdown of traditional social support. Sudden invasion of privacy and publication of photographs of their misfortune that were taken during the media coverage of a disaster are often met with resentment from local communities[6], however research data also suggests that some victims and relatives welcome a chance to talk to reporters, albeit in a controlled situation[7]. Information on the missing persons or deceased and eye-witness accounts are considered ‘hot’ news, or as Shipp portrays it: “dead sells news”[8].  In the next paragraphs, the concept of post-mortem privacy will be explored followed by an examination of privacy issues which may arise in the aftermath of a disaster.

2.1 Context of Post-mortem Privacy in Disaster Victim Identification

Before we explore the concept of post-mortem relational privacy, we need to understand what a ‘disaster’ and ‘privacy’ entail.

Disaster Victim Identification (DVI) has been defined from both humanitarian and forensic perspectives; however no universally accepted definition has been agreed. The World Health Organization’s (WHO) definition of a disaster is focussed on the humanitarian effort by declaring it “a sudden ecological phenomenon of sufficient magnitude to require external assistance”. The most commonly adopted definition in the forensic literature refers to a disaster as “an episode in which the number of fatalities is in excess of that which can be dealt with using the normal mortuary facilities”[9]. The latter definition is flexible albeit subjective and its applicability very much depends on the local capability to deal with an event involving multiple deaths. What is clear, however, is that there is no universally agreed definition of disaster victim identification.

The term “privacy” is frequently used in sociological and legal contexts, yet there is no single definition or analysis or meaning of the term.  It is, however, commonly understood as an insulation from observability, a value asserted by individuals against the demands of a curious and intrusive society[10]. An intrusion of privacy can be regarded as “demeaning to individuality and an affront to personal dignity”[11]. Berg pointed out that throughout life, two principles are of importance for an individual to control his/her identity[12]: 1) the ability to control what information other people know and; 2) the ability to shape his/her own public image and personality or in other words, to control what others know about them.

It has been argued that legal rules suggest that the dead do not have rights.[13] Indeed, the EU data protection and privacy directives do not recognise the rights of the dead and the post-mortem privacy jurisprudence finds its origin mainly in freedom-of-information acts and case law. The post-mortem relational privacy concept recognises that, although a person has died, information about him or her continues to exist and has posthumous value to the decedent’s surviving relatives.[14] It is here that we can ask the question: how should we balance the deceased’s right to shape their image and protect their dignity, with the rights of freedom of expression, societal interests and the privacy  interests of the deceased’s families?

Relational privacy has its foundation in two premises. Individuals maintain their relational status with relatives even after those family members die.  Secondly, although the dead no longer have a privacy interest in personal information about themselves, their surviving relatives who wish to cherish their memories of the deceased, may well do.[15] Autopsy photos, death scene images, pictures of the deceased in coffins, and tapes and transcripts of phone calls or black boxes that contain the last words of the deceased are frequently at the forecourt of post-mortem privacy controversies.[16] The interest in this topic is heightened by a number of high profile cases, mainly in the USA, and an array of jurisprudence on the subject is available.[17] One such case is that of Nicole Catsouras, an 18-year old girl, who died following a car crash and close-up photos of Nikki’s disfigured body where subsequently leaked by an investigator before going viral on the Internet, while the most graphic images were also emailed to her parents and sent to cell-phones belonging to Nikki’s sister and cousin.[18]

Invasion of post-mortem relational privacy mainly relates to images of the deceased, although cases of other intrusions have been reported such as hacking of mobile phone messages of 7/7 bombing victim’s families[19] and ‘trolling’ of relatives[20].

2.2 Privacy and Publication of Visual Material of Disaster Victims

Photos are an excellent medium to promote strong feelings to the general public, however they may also intrude in to the post-mortem relational privacy of surviving relatives who have to cope with the sudden loss of a relative. Those relatives, who may still be waiting for news on the fate of their loved one(s), may be confronted with graphic images or shown a loved one’s photo because of some development unknown to them.[21] We have to distinguish here between publications of visual material by professional bodies such as the press and those shared online by individuals, e.g. on social media, for sensationalist reasons or financial gain.

2.2.1 Visual material and the media

Internet and mobile technologies have been particularly effective in linking disaster events to written accounts, photographs and web blogs, connecting to a larger audience that can vicariously participate in the developing news item.[22] Recent disasters such as the DANA air crash in Nigeria are an example, most notably the images of the burned body of the deceased being removed from the scene. In the Sukhoi Superjet 100 plane crash in Indonesia, images of bodies supposedly of victims of this plane crash were uploaded, which later turned out to be from another air crash.[23] It is also not uncommon to see photos of bodies stacked in the morgue with grieving family members desperately attempting to find their missing relative, or photos of grieving parents embracing their deceased children.[24] An interesting observation was made by Li and Rajaratman who noted, that in their experience, religious beliefs regarding death will be brought up in the media and exploited.[25] Li and Rajaratman’s article refers to the 2004 South-East Asia Tsunami in particular. Buddhists believe that cleansing rituals must be performed on the dead to calm the ‘wandering spirits’ of those who met a violent death. The authors cited a news article that implied that the ‘wandering spirits’ were roaming the Buddhist temples (temporary morgues) to look for their bodies, while appearances of ghosts were also reported. Journalists were allegedly asked not to report on those ‘ghostly’ sightings as it could potentially affect the tourist industry. Another question which arises is: what is the impact of such stories for locals who are too frightened to travel to the temple in a bid to identify the bodies for fear of the ‘spirits’; is their right to identify their loved one denied by publication of such stories?

Furthermore, not only are photos of the dead which are published by the media significant ‘but equally prominent, and far more poignant, are photographs of personal belonging with great sentimental value such as family photo albums that managed to survive the catastrophe (..)  we recognise its value in this context is pronounced as a central marker of time and identity, of where “we” have been and who “we” are, as well as a family relic to be passed down from one generation to the next’.[26] Indeed, such personal items act as “important symbols of a common humanity that invites us to activate a powerful stranger relationality” and enforce a sense of personal connectedness to this unknown victim of the tragedy, whether he/she has survived or perished in the disaster. Scanlon refers to this as “humanisation”,[27] a focus of the media to show the victims as individuals. It can however also be argued that this is merely a voyeuristic approach to view en masse an individual’s intimate moments and earthly belongings in the aftermath of personal tragedy.

Best practices guidelines for organisations involved in mass emergency response increasingly recognise how sensitive information of the deceased, injured, non-injured or missing persons, should be communicated.[28] Although the media has addressed this issue as well, there is still uncertainty as to what constitutes ‘sensitive’ in this respect. The Society of Professional Journalists (SPJ) states in its code of ethics that journalists should “be sensitive when seeking or using interviews or photographs of those affected by tragedy or grief” while “showing good taste. Avoid pandering to lurid curiosity.”[29] Concerns about victims of the 2004 Asian tsunami and their grieving relatives were raised by medical professionals who urged that ‘the public’s right to information should not outweigh the right of victims of natural disasters to privacy, confidentiality and dignity.’[30] It is interesting to note the Katrina disaster in New Orleans in this respect. The Federal Emergency Management Agency (FEMA) had requested that photos of dead bodies would not be shown by news agencies in their coverage of Hurricane Katrina. This was met with an angered response, with some claiming that “newsrooms can’t tell the truth of this story if they don’t show some bodies” or “sometimes a dead body IS the story.”[31] Cohen-Almagor made a fitting observation: “The right to free expression and free media, supplemented and strengthened by the concept of the public’s right to know, does not entail the freedom to invade individual privacy without ample justification”[32].

In large-scale disasters, complete control of the media is very difficult.[33] Indeed we must also consider local cultural values and how death is perceived in societies around the world. In certain countries, it is accepted to publish images of a disaster scene in newspapers, occasionally showing bodies still in situ or removed during the recovery operation, such as the Yak-24 plane crash in Yaroslavl involving the Russian Lokomotiv hockey team.[34] It is also not uncommon for bystanders to film the remains of disaster victims on their mobile phones and upload those images or movie captures on the Internet for everyone to see. In Thailand for example, it is common for first responders to pose with a body as this is seen as sign of pride and as a way of showing that one has helped take care of the deceased.[35] While such practices may cause outrage in other societies, it is an accepted practice of local media which can further be explained by cultural differences, lax regulation and a desensitised approach to death. This practice may be particularly harmful for relatives who have lost someone in another country and are confronted with harrowing images on the Internet. Indeed, Taylor[36] argues that the local press is more likely to print images of deceased non-nationals, compared to imagery of bodies of nationals when they may be recognised by the local community. However, this does not mean that next-of-kin cannot access those images from a different geographical area, particularly if they search for relevant (news) articles in a bid to establish the facts of what happened.

Nonetheless, media intrusion is not always unwelcome; in some cases next-of-kin may actively want to seek coverage to publically vent their frustration and anger in relation to the identification process or inform the public of possible lawsuits or investigative developments.[37] This is often a response to delays in the identification process or lack of communication thereof from authorities dealing with the incident, as for example in the aftermath of the 7/7 terrorist bombings in London.[38] Reports of misidentifications are also commonly reported by the media, for example the case of Dmitry Ivanyuta, who was initially listed among the dead after an ATR 72-200 plane crashed near the western Siberian city of Tyumen in April 2012.[39] Those reports are frequently initiated by the relatives themselves in order to express their frustrations with formal investigations being carried out. In such scenarios, relatives effectively waive their right to privacy.

2.2.2 Images of the Dead and Identification

In large-scale disasters such as the 2004 South-East Asia tsunami and the 2011 Japan tsunami, it was not uncommon to see galleries with hundreds of images of decomposed bodies in a bid for relatives to identify their missing family members[40]. Several sites were created in the aftermath of the 2004 Tsunami with images of bodies taken in hospitals including many foreigners. Recently, in the 2011 Sendong flooding in the Philippines, photos of decomposed bodies, washed-up on shore, were uploaded on a Facebook profile in an album called ‘GAPNOD with DEAD BODIES’.[41] While this is not an accepted practice according to Western values, we should not see those practices only in light of different cultural values but perhaps also as well-meant initiatives to assist in the identification of those deceased.[42] Indeed, in many countries and jurisdictions, visual identification is still legally admissible as proof of identification.[43] This may lead to an interesting paradigm of post-mortem relational privacy when we look at this issue in light of the identification of missing persons. From the perspective of a relative, the main question to be asked here is: does the need of the families to know the fate of a missing relative override the fact that post-mortem photos of their deceased relative – perhaps in a state of decomposition – are displayed publically? Or what if a body is ‘recognised’ from a photo, while in fact this may have been someone else? Or what if a body is shown live on the news and this is the moment relatives first learn about the death of a family member or friend?

Of further note, is that the media is not the only source which may exploit images of the deceased. Shortly after the 2004 Tsunami, Photos and DVD’s began to appear on local markets showing scores of bodies of tsunami victims, mostly tourists.[44] This material, selling for up to 80 baht per picture, was mostly sold to European tourists, with one of them explaining that “a lot of people want them. A lot of people want to see these”.[45] Although opinions are divided on whether such pictures should be publically sold, it has been said that “as long as there is a market people will supply it.”[46] Not only did the sale of this material provide the locals with a source of income, it was also used as a means of religious propaganda to condemn the faith of sinners to local communities and demonstrate the need to fully focus on their religion in order to prevent such punishment. In this scenario, intrusion of privacy is not only limited to commercial exploitation of images of the deceased but also as an ‘educational’ tool to remonstrate the faith of sinners. Indeed, the fact that many bodies of tourists were found naked or with a limited amount of clothes was interpreted as a sign of punishment and resultant violation of bodies of sinners for visiting hard-hit tourist resorts like Khao Lak and Phuket – as it was suggested that many people merely visited such places for the purpose of satisfying their sexual lust and committing sins – rather than contributed to the natural forces of the Tsunami waves.[47] Those intrusions may be seen as a deviation from Western values but may represent culturally accepted and unregulated practices in other parts of the world and in the chaotic aftermath of natural disaster, such practices are hard to control.

2.3 Disclosure of Personal Information

Another point to consider is the release of ‘personal data’ in disasters by authorities to aid the emergency response and identification process of those injured and deceased. This information may include data of a sensitive nature such as medical records. The precise definition of personal data varies across the EU due to the slightly different ways in which the Data Protection Directives are implemented in law, but, fundamentally, personal data “is any information that relates to an identified or identifiable living individual” (known as a “data subject”) and an identifiable person is “one who can be identified, directly or indirectly, in particular by reference to an identification number or to one or more factors specific to his physical, physiological, mental, economic, cultural or social identity.”[48] This definition suggest that the EU directive is applicable to living subjects and not the deceased.

In the UK, the release of health records for the purposes of identification of the deceased and investigation of certain person’s deaths will usually fall under the jurisdiction of the Coroner. However, there is no statute law that requires provision of confidential information to the police or to courts, even where the matter in issue is a serious crime. Medical records remain confidential after death but may be made available to the deceased’s personal representatives or any person who may have a claim arising out of the deceased’s death, subject to some restrictions, under the terms of the Access to Health Records Act 1990.[49] Coroners are entitled to obtain copies of medical information that are relevant and necessary to their inquiries. For example, in response to the destructive earthquake that struck Christchurch on 22 February 2011, the Privacy Commissioner issued a code permitting agencies to collect, use and disclose personal information of victims of the earthquake for the purpose of assisting in dealing with the disaster. The so-called ‘Christchurch Earthquake Code 2011’ acted as a temporary amendment to the Australian Privacy Act in response to difficulties encountered in Australia and Canada with the data protection laws which inhibited the disaster relief and identification of victims and survivors of the Boxing Day tsunamis.

A point to consider here is the negative impact the release of personal (and confidential) data may have. If close relatives are unaware of certain elements of the deceased’s personal life, access to this private information after death may not only have a negative impact on the grieving process but may also interfere with the post-mortem privacy of the deceased. For example evidence of an affair, financial debts or preparations for a divorce procedure may be exposed. In addition, DNA identification may further expose previously unknown information. Cases have been reported in which the purported genetic relationship was inconsistent with the genetic data, for example when it is discovered that the unsuspecting father cannot be the biological father of one of his children or when a surviving child is informed that he/she is adopted. Such issues should be treated with great care as they may cause significant distress to the surviving relatives. A further problem that exists in this context is that a person who is presumed killed in a disaster may in fact still be alive, for example a Person Unable to Self-Identify (PUI). In theory, the living person has to provide informed consent to release their personal information including medical and dental records. Particularly in large-scale natural disasters, this may cause considerable problems.

The release of post-mortem information relating to the deceased ha been given vast attention in the legal jurisprudence. This not only includes autopsy reports, but may further include scene photos, autopsy photos of the deceased and cause and manner of death. In aviation disasters, transcripts retrieved from the voice recorders are made public during inquiries and/or published in accident investigation reports. In many occasions, voice recordings are made public. While this is not common practice, hearing the last words of those killed in the disaster may cause distress to the surviving next-of-kin and may be seen as an intrusion of privacy. Legal proceedings to prevent the publications of voice recordings in those circumstances are not uncommon. Most notably, legal court proceedings were filed to prevent the release of the voice recordings of the Challenger disaster on 28th January 1986 in which the spacecraft Challenger exploded seventy-three seconds after lift-off, and all seven astronauts aboard were killed. Legal arguments brought up in the court proceedings in such cases are particularly centered around national Privacy Act legislation and the definitions and interpretations of ‘personal information’[50] and ‘identifiable individual’. In the Court of Appeal proceedings, NASA asserted that release of the tape would encroach upon the personal privacy of the astronauts’ families by subjecting them to a replay of the voices of their loved ones, “an intrusion on their grief which certainly would exacerbate feelings of hurt and loss”.[51] Legal arguments in this case focussed on the ‘personal information’ contained in a voice. It was argued that because the voice “does not contain personal information – information “somehow related to an individual’s life.” What, then, does the court consider to be “personal” information? Where is the distinction between the non-personal voice and the personal citizenship, date of birth, and place of birth?.”[52] These legal issues require a complex balance between the privacy rights of the dead and the needs of the next-of-kin.

A disaster in another country involving foreign nationals may pose an additional problem in terms of privacy of ante-mortem personal information. The ‘host’ country in which the disaster took place has the legal jursidiction to handle the disaster in accordance with its national legislation. The host country may request a country where the missing persons reside to provide ante-mortem identification information to identify the deceased. The provision of a missing person’s ante-mortem personal information will be subject to the national privacy and data protection laws in the host country, which may be less stringent than other countries. As the host country takes possession of the personal information of those killed in a disaster, further questions may arise. For example, what procedures does the host country have in place to protect the personal data of foreign nationals after the identification process is completed? Does the national law have any provisions to prevent that personal information of foreign nationals will not be used for publications or research?

3. Privacy and On-line Tracing of Missing Persons in Disasters

In the immediate aftermath of a disaster, next-of-kin unaware of the whereabouts of their relative(s) will use various media in a bid to trace missing persons. Such initiatives may include on-line applications and social media or circulation of leaflets with missing person information. By providing this information to the public, privacy issues invariably come to light.

3.1 Circulation of Missing Persons Information

One method of tracing missing persons following a disaster is circulation of printed leaflets with information about the missing persons. The information contained on those leaflets invariably consists of; a recent photograph of the missing person; name, age, sex, hair style and colour; a description of clothes or jewellery the person was wearing at the time of disappearance; location where the person was last seen; other physical characteristics such as tattoos or scars; and contact details of next-of-kin. Few guidelines exist as to how the media should deal with the reporting of missing persons, and when this would infringe the privacy of surviving relatives. Leaflets are publically displayed on noticeboards, lamp posts, manually distributed to members of the public or posted online on dedicated websites for tracing missing persons in a particular disaster. Unfortunately, those well-meant initiatives also attract opportunists who may use the provided information and contact details for news stories or personal gain. In the immediate aftermath of the 9/11 terrorist attacks, the New York Times reacted to the missing-persons fliers by assigning a half-dozen reporters to call the phone numbers on them and, if they got permission, to write profiles on those who appeared on the fliers.[53] In this respect, the BBC’s editorial policy on privacy and missing persons state that the editor(s) should consider “at what point the right of the missing person to privacy outweighs the public interest in identifying them, or the desire of family and friends to trace them”.[54] The right of the missing person to privacy is a balanced consideration based on criteria “in relation totheir age, their legal status, their state of health and the circumstances of their disappearance.”[55]

3.2 On-line Tracing Initiatives

Following the 2004 Tsunami, various on-line initiatives were launched to aid in tracing missing persons in disasters. While initially created by individuals, corporate organisations followed quickly, launching various dedicated applications in the aftermath of a disaster. Most notably, they included Google Person Finder,[56] Social Networking Services and micro-blogging sites. Google Person Finder is a web application that provides a registry and message board for survivors, family, and loved ones affected by a natural disaster, to post and search for information about each other’s status and whereabouts. The Google Person Finder has been activated for a number of disasters, including the 2011 Christchurch Earthquake, the Haiti and Chile earthquakes in 2010, as well as the floods in Pakistan last year Brazil in 2012.

Another player in the on-line field of tracing initiatives is social media.  The concept of online social networking dates back to the 1960’s,[57] but its use has been massively expanded since the introduction of the Internet. Facebook allows people to share common interests, connect with friends, participate in discussion forums and express themselves through a personalised blog.[58] The revelation behaviour and apparent openness to reveal personal information to vast networks of loosely defined acquaintances and strangers is a phenomenon associated with on-line social networking.[59] Personal information such as contact information (including email addresses and phone numbers), educational history, hobbies and interests, sexuality, drink and drug-related activities, visited locations and intimate photos of friends and families may be obtained. Users however appear largely unconcerned about privacy risks[60] and in the event of a disaster, personal information can easily be retrieved. In the aftermath of the Virginia Tech shooting, information dissemination activities arose where people who were geographically distributed, ‘discovered’ the names of the shooting victims by using on-line sites as points of gathering and collaboration well in advance of official news releases.[61] This may cause much distress when the names are released before close relatives have been informed officially. In this respect, the release of names of victims to the media by the responding authorities should also be given particular attention.

Facebook is another important social networking initiative not only for tracing missing persons but also as a means of commemoration, particularly after solidarity-producing events such as natural disasters and mass tragedies.[62] In the aftermath of the 2010 Haiti Earthquake, a dedicated Facebook profile was created for tracing those believed to be missing in Hotel Montana, Port-au-Prince in Haiti.[63] Details and photos of those missing, including personal effects, physical characteristics and room numbers where they were staying, were uploaded by relatives in a bid to find their loved ones. A link to the personal Facebook profile of the missing person was frequently included. When a missing person was identified and announced on the Facebook page, condolences and messages of support were uploaded on the page by Facebook members unknown to the relatives of the missing person.

Other initiatives used for tracing missing persons in disasters include Twitter[64], the Youtube Missing Person Finder Channel, ‘Familylinks[65]’ and Skype.[66] In large-scale disasters such as the 2011 Tsunami and Earthquake in Japan, much of the infrastructure may be destroyed due to the destructive forces or power outages, including fixed Internet access points on personal computers, television and phone landlines. Web-enabled devices such as mobile phones and smartphones are primary sources of media access in those situations[67] and may further aid in re-unification of family members.

While the aforementioned initiatives are intended to aid the relatives of those missing, uploading personal details of those missing in a bid to trace them have also lead to abuses of this publically available data. Identity theft and life insurance fraud are realities in the wake of large disasters.[68] Publication of the victim list or posted missing person information has seen a variety of scams that propagate through email or social networks in a number of disasters, such as the 2004 South-East Asia Tsunami, the Concorde plane crash in 2000 and the 9/11 terrorist attacks. Names of missing persons are also easily available from social networking sites, for example Facebook pages set-up for tracing missing relatives. Often links to the personal pages of the missing person are provided along with contact details such as email addresses and phone numbers of next-of-kin. Scammers may troll for this information to exploit in their email scams.[69]  Another case of abuse of on-line technology was reported in the 2010 Japan Earthquake in which relatives uploaded information on the Google Person Finder in the hope of finding their missing family member. Someone subsequently placed false information on the website that the missing person was deceased, resulting in much grief to the family.[70] The missing person later contacted the family and informed them that he was indeed alive.[71] Subsequently, warnings on the reliability of information, specifically death notices, have been released.[72]

Similar occurrences were reported by Kendra and Wachtendorf after the 2001 World Trade Center Attacks, where websites falsely stated that people who were reported missing had been found.[73]  Hoax emails were sent to the families and friends of people missing in the Asian tsunami disaster, falsely confirming their deaths.[74]  After the 2011 tsunami in Japan, 1.7 million fraudulent websites and fake domains were created by cybercriminals asking for donations,[75] sometimes contacting family and friends via Facebook. One of the ‘trolls’ modus operandi is to “scan for pages of the deceased, steal the pictures, doctor them, and post them onto social media sites such as Facebook” with one of them claiming ‘I ruin family, friends and grief tourists’ view of a dead person.’[76]

This disturbing on-line behaviour will undoubtedly raise questions as to whether social networking providers should do more to curb such malicious attacks on grieving relatives. The unpoliced nature of these vast streams of data has made clear that not all information can be trusted, and may also add substantial grief to the families of those missing. Furthermore, questions may arise as to how the personal data provided to Internet Service Providers may be used or protected. Indeed, terms and conditions for use of those services do not provide information for how long the data will be stored or if any data will be deleted if a missing person is found alive. Moreover, a maximum term for the retention of personal data in disasters is hard to define: the identification process may take many years as seen in the 9/11 World Trade Centre terrorist attacks or the 2004 South-East Asia tsunami for example.

4. Disasters and On-line Memorialisation and Grief

It is recognised that a support system of family members, friends, relatives, and others in the individual’s social network may serve to moderate the traumatic impact of a disaster on survivors, e.g. the sudden loss of a relative[77]. The perception of survivors, relatives and friends of missing persons, that they are being supported and that they belong to a valued social group and community is beneficial in helping them cope with the after effects of a disaster[78]. Social Networking Services can facilitate such support systems.[79]

Social Networks Services such as Facebook have led to new ways of remembering the deceased in a more public way than ever before. The deceased’s online social identity can be represented in the network or community through continued online interactions with the deceased or the memorialising of online profiles to aid grief recovery.[80] Upon notification by relatives, an individual’s Facebook profile page can be ‘memorialised’, which allows confirmed friends to view the profile and leave posts in remembrance, although access details will not be provided and content cannot be altered. Facebook’s death policy requires ‘proof of death’ such as an obituary or news article.[81] However, what if the missing person is never found? A year after the devastating Earthquake and Tsunami in Japan, over 3200 people are still listed as missing.[82] In large open disasters, such as the 2004 Tsunami in South-East Asia or the 2011 Earthquake and Tsunami in Japan, it is inevitable that a missing person may remain unidentified for a considerable time, or perhaps may not be found at all. Should special provisions be made in policies for those missing, presumed dead? Since content can be posted but not altered on a memorialised page, questions can also be asked about how the page will be moderated e.g. in case of cyber-bullying.

Commemoration is not restricted to the deceased user’s profile alone. Collective group pages may also be created by a user to commemorate an event. In the case of the Hotel Montana Facebook page,[83] relatives of the deceased from all over the world and unknown to each other can commemorate their loved ones and grieve together as a group, something that would not have been possible a decade ago. At the anniversary of the event, relatives post ‘virtual’ candles or other messages on the page to commemorate and remember all those who lost their lives. A study by Brubaker and Vertesi of content posted on MySpace identified that users return to the deceased profiles over extended periods of time posting comments as they process their grief and share their reflections of the person.[84] Facebook hosts many memorial pages dedicated to various disasters, some of which have occurred decades ago even before Facebook was created in 2004. They may have been created to keep the memory alive of those who have perished, but also as a means to find justice for the victims, for example “Justice for the 96 Hillsborough Victims”[85] or the profile page “Bhopal Gas Tragedy – World’s Worst Industrial Disaster awaits Justice”[86]

‘Virtual’ worlds are another phenomenon introduced in the past decade and present a new means of remembering those killed in a disaster. The most well-known is Second Life, a ‘virtual’ world in which people can create their own virtual identities and ‘worlds’ where random users can interact with each other. Most notably, virtual monuments and grave stones were created in second-life to remember each of the victims of the Virginia High Tech Shooting in 2007[87] and the 9/11 terrorist attacks.[88] Moderation of online memorials is often ungoverned[89] or the creation unsanctioned.[90] Violations of terms and conditions or privacy intrusions for example by posting harmful content are therefore left to the users or members of a group to monitor and report.

5. Discussion and Conclusion

A disaster is often an unexpected event resulting in a sudden loss of a relative which may have long-lasting effects on a community and survivors themselves. Not only do surviving relatives have to cope with the sudden loss of a relative, their personal lives and that of the deceased are also propelled in to the limelight of the media; a phenomenon that is facilitated by the rise of Social Networking Services and increasingly advanced search engines. With the advances in the digital age, more and more of our personal lives is stored on-line or on digital media. This creates complexities not only for the relatives who wish to identify their loved one, but may also add an additional burden in terms of determining ownership of digital data, commemoration of the deceased and their ‘digital legacy’. The need for death policies and thano-sensitive designs is now gaining recognition by ISPs, mainly due to adverse media attention and pressure from relatives.

In the event of death, a paradigm of post-mortem legacy becomes apparent; while the families may want to access personal ‘on-line’ accounts of the deceased as a means of coping with the death, there may also be a danger that ‘unwanted’ information is exposed contrary to the deceased’s wishes – an invasion of the deceased post-mortem relational privacy.

As Calvert rightly acknowledges, privacy-of-death controversies has revolved around balancing the legal right of the public to information about the dead and the immediate relative’s privacy rights, respect and dignity.[91] In this article, attention to intrusions of privacy in disasters by the press, social media and its users and parties involved in the identification process were raised. Professional press bodies have ‘codes of conduct’ in place to govern the behaviour of journalists. The recent Leveson inquiry[92] in the United Kingdom to examine the culture, practices and ethics of the press, resulted in further recommendations. The definition of personal data varies across the EU due to the slightly different ways in which the Data Protection Directives are implemented in law, however, the Directives is only applicable to living subjects and therefore not applicable to post-mortem privacy issues. Calvert recognises that post-mortem privacy jurisprudence arises from both common law, derived from legal jurisprudence, and freedom-of-information laws[93]

The availability of handheld mobile technology and on-line access has led to a situation where everyone can be a budding journalist and contribute to a news story. Un-moderated content such as graphic images of the deceased may be uploaded and spread over the Internet via web blogs, social profiles or micro-blogging sites. The rise of Social Networking Services and search engines has further resulted in loss of anonymity and personal information of victims and that of family members can easily be retrieved on-line. Cyber-bullies and Internet trolls increasingly target those affected by tragedy, fuelled in part by the degree of anonymity that the Internet provides.[94] The increasing use of web-based services has led to new forms of intrusions of post-mortem privacy in the event of death, and on-line providers and media should accept their social responsibility in drafting clear policies to minimise the distress for those surviving relatives after their loved one’s sudden demise.

A distinction should be made between personal data that is willingly shared and unwillingly shared. Intrusions of privacy by individuals are difficult to control. Once information is posted it becomes increasingly difficult to remove particularly with the speed information is shared among internet users. While regulations are in place to protect the privacy of individuals and press control, prevention of on-line intrusions by individuals is often left to users, webhosting companies and Internet Service Providers. Social media providers are trying to curb those practices of publishing allegedly graphic and harmful material. For example, Facebook’s terms and conditions state that “(the user, sic) will not post content that: is hate speech, threatening, or pornographic; incites violence; or contains nudity or graphic or gratuitous violence.”[95]The user’s Facebook account may be suspended after violation of the terms and conditions. Furthermore, Facebook offers a ‘report’ button which allows users to report content which is deemed offensive.

Personal data of the deceased may also be willingly shared by relatives to trace missing persons. By submitting information to services such as Google Person Finder, the user agrees to the terms and conditions of the provider that data can be used in accordance with their privacy policies. Additionally, more than often Internet Service Providers will state that the submission of content is the sole responsibility of the entity that makes it available and thus any implications of violations in using the services, or liability of the company thereof, are less specifically defined.[96]  Swire’s metaphor of ‘elephants and mice’[97] concerning the legal regulation of the internet must be mentioned in this respect. In this principle, Swire explains that legal regulation can work against large companies subject to jurisdictional regulations (‘elephants’), however due to their multi-national nature may cause legal issues concerning the jurisdictional choice of law and which sovereign’s rules should apply for a particular case. For this reason legal regulation is focussed on the mobile, individual users or small ISP’s (‘mice’) but which are difficult to catch and are likely to try and avoid legal jurisdictions.

National legislation and legal jurisdiction is another important element with regards to privacy issues in disasters involving foreign nationals. The country in which the disaster takes place has legal jurisdiction over the handling of the disaster according to their national legislation and values. This will undoubtedly raise questions as to how personal information about the deceased is protected. After the identification process is completed or has ceased, it is often unclear where the personal data of the missing and the deceased will be kept, who will take responsibility for the data, who will have access to it or how long it will be stored. The Interpol DVI standards, recommended for use by Interpol’s 190 member countries in disasters involving foreign nationals, provide limited guidance on those issues other than stating that every DVI operation is subject to the laws of the country in which the disaster in question occurs”.[98] Surprisingly, the terms ’privacy’ or ‘data protection’ are not mentioned in the DVI guidance document. Secondly, the guidance document states that “(..) the first step in this process is to formulate agreements regarding the requirements applicable to the collection and transmission of AM data”. Indeed, this statement excludes not only the handling of PM data but also any issues related to storage, protection or maintenance of identification data. Memoranda of understanding, mutual working agreements and standard operating procedures between parties involved in the disaster victim identification process may describe those procedures, however they are not legally binding.

To conclude, this article raised awareness of issues of post-mortem privacy in disasters. In the aftermath of a disaster, attention is more than often focussed on the deceased and their living relatives who –frequently- unwittingly find themselves in the spotlight of the (social) media. Information about those involved and images taken by individuals may be shared on social media before the authorities can respond to the disaster itself. The speed in which information is shared globally, in combination with a potentially large number of different legal jurisdictions where websites may operate, make it inherently difficult to counter intrusions of post-mortem privacy.  The most appropriate solution to counteract any unwanted privacy intrusions is to have procedures in place to prevent images from being taken in the first place in the immediate aftermath of the disaster, including measures for crowd control, scene management and professional ‘code of conducts’ for local respondents to the disaster, such as emergency responders and law enforcement. In (natural) disasters this will, however, be almost impossible. Nor will it be entirely possible to exclude cultural attitudes surrounding death and its uses of visual material of the deceased from the equation. Additional recommendations, e.g. in the form of a resolution or guidance document, may be issued by Interpol to its member countries in terms of data protection, privacy issues, access to the personal data or any other issues concerning transmission, storage, access or release of personal data that may arise in the course of the identification process. Disasters involving foreign nationals will involve many cross-border agencies each of which may be governed by their own codes of conduct and local legislation, and the complexities involved in the disaster victim identification process should be thoroughly examined in the future to prevent any additional distress to the relatives of the deceased.



* Postdoctoral Researcher, Centre for Anatomy and Human Identification, University of Dundee

[1]  A. Busuttil, J Jones and M Green, Deaths in Major Disasters – The Pathologist’s Role (London, The Royal College of Pathologists, 2001), at 5.

[2] R Cohen-Almagor, “Privacy: Ethical and Legal Considerations” (2006)6 Communication Law Review 47-72.

[3] J Scanlon and C McCullum “Media Coverage of Mass Death: Not Always Unwelcome” (1999) Australian Journal of Emergency Management 14 (3) at 55-59.

[5] D Wenger, J Thomas, and C Faupel, Disaster Beliefs and Emergency Planning (Newark, Disaster Research Center, 1980), at 40.

[6] S Becker, “Psychosocial Care for Adult and Child Survivors of the Tsunami Disaster in India” (2007) 20 Journal of Child and Adolescent Psychiatric Nursing 148–155.

[7] J Scanlon, “Research about the Mass Media and Disaster: Never (Well Hardly Ever) The Twain Shall Meet” in D McEntire (ed), “Disciplines, Disasters and Emergency Management Textbook – FEMA EMI Higher Education online textbook” (2009) available at http://training.fema.gov/EMIWeb/edu/ddemtextbook.asp (accessed 3 January 2013)

[8] D Shipp, “Inflated Casualty Reports: Inaccurate and Unethical” (2006) 15 Journal of Information Ethics 11-13.

[9] Royal College of Pathologists, “Deaths in Major Disasters—The Pathologists Role” (2000), 2nd edn. London: Royal College of Pathologists.

[10] R Post, “The Social Foundations of Privacy: Community and Self in the Common Law Tort” (1989) 77 California Law Review, at  957.

[11] J Whitman, “The Two Western Cultures of Privacy: Dignity versus Liberty” (2004) 113 Yale Law Journal 1151-1164.

[12] J Berg, “Grave Secrets: Legal and Ethical Analysis of Postmortem Confidentiality” (2001) 34 Connecticut Law Review 81-122

[13] K Smolensky, “Rights of the Dead” (2009) 37 Hofstra Law Review 763–64, at 763

[14] A Hering, Post-mortem Relational Privacy: Expanding the Sphere of Personal Information Protected by Privacy Law (University of Florida, Unpublished thesis, 2009)

[16] C Calvert, “The Privacy of Death: an Emergent Jurisprudence and Legal Rebuke to Media Exploitation and a Voyeuristic Culture” (2005) 26 Loy L.A. Ent L. Rev 133-169.

[17] See for a number of high profile cases: C Emery, “Relational Privacy—a Right to Grieve in the Information Age: Halting the Digital Dissemination of Death-scene Images” (2011) 42 Rutgers Law Journal 765-818; C Calvert, “Support Our [Dead] Troops: Sacrificing Political Expression Rights for Familial Control over Names and Likenesses” (2008) 16 William & Mary Bill of Rights Journal 1169; C Calvert, “Salvaging privacy & tranquillity from the wreckage: images of death, emotions of distress & remedies of tort in the age of the Internet” (2010) 2010 Michigan State Law Review 311-340; A Hering, Post-mortem Relational Privacy: Expanding the Sphere of Personal Information Protected by Privacy Law (University of Florida, Unpublished thesis, 2009)

[18] C Emery, “Relational Privacy—a Right to Grieve in the Information Age: Halting the Digital Dissemination of Death-scene Images” (2011) 42 Rutgers Law Journal 765-818

[22] M Laituri and K Kodrich, “On Line Disaster Response Community: People as Sensors of High Magnitude Disasters Using Internet GIS” (2008) 8 Sensors 3037-3055.

[25] M Li and D Rajaratnam, “Waves of Destruction: A Portrayal of Natural Disasters by Mass Media” (2006) 22 Malaysian Journal of Communication 97-115.

[28] G Seynaeve, Psycho-Social Support in Situations of Mass Emergency. A European Policy Paper Concerning Different Aspects of Psychological Support and Social Accompaniment for People Involved in Major Accidents and Disasters (Ministry of Public Health, Brussels, Belgium, 2001), at 16.

[30] A Bhan, “Should Health Professionals Allow Reporters inside Hospitals and Clinics at Times of Natural Disasters?” (2005) 2 PLoS Medicine e177.

[42] We note that similarities can be drawn with for example publically accessible unidentified bodies databases set-up by police organisations and Coroners in the USA. Information surrounding the case, circumstances of recovery, identifying features and images of the body, sometimes of decomposed facial features and tattoos, can be searched in a final attempt to identify the deceased with help of the public. One such initiative is the National Missing and Unidentified Persons System (NAMUS) – https://identifyus.org/en (accessed 17 September 2012).

[43] R Ruwanpura et al, “Identification of Severely Burnt Bodies Due to Post Collision Fire: Bus – Truck Collision at Induruwa, Southern Sri Lanka” (2012) 3 Journal of Forensic Research 143.

[44] C Merli, “Religious Interpretations of Tsunami in Satun Province, Southern Thailand: Reflections on Ethnographic and Visual Materials” (2009) 14 Svensk Religionshistorisk Rsskrift 154-181.

[49] The Data Protection Act 1998 is applicable to identifiable, living subjects.

[50] This term is used interchangeably with the legal term ‘Personal Data’.

[53] N Mills, “Images of Terror: Enduring the Scars of 9/11” (2009) 56 Dissent 75-80.

[57] R Gross and A Acquisti (2005) “Information Revelation and Privacy in Online Social Networks” (2005) Proceedings of WPES’05, Alexandria, VA: ACM, at 71-80.

[58] J Kim and K Ahn, “Social Networking Service: Motivation, Pleasure and Behavioural Intention to use” (2011). 54 Journal of Computer Information Systems, 92-101.

[61] L Palen, “Online Social Media in Crisis Events” (2008) 3 Educause Quarterly 76-78.

[62] J Hawdon and J Ryan, “Social Relations that Generate and Sustain Solidarity after a Mass Tragedy” (2011) 89 Social Forces 1363–1384.

[64] M Kaigo, “Social Media Usage during Disaster and Social Capital: Twitter and the Great East Japan earthquake” (2012) 34 Keio Communication Review 19-35.

[65] Created by the International Committee of the Red Cross (ICRC). Families can search for missing persons or survivors can register their status – http://www.familylinks.icrc.org (accessed 14 August 2012)

[67] A Acar and Y Muraki “Twitter for Crisis Communication: Lessons learned from Japan’s Tsunami Disaster” (2011) 7 International Journal of Web Based Communities 392 – 402.

[73] J Kendra and T Wachtendorf, “Reconsidering Convergence and Converger: Legitimacy in Response to the World Trade Center Disaster, Terrorism and Disaster: New Threats, New Ideas” (2003) 11 Research in Social Problems and Public Policy 97-122.

[77] J Cook and L Bickman, “Social Support and Psychological Symptomatology following a Natural Disaster” (1990) 3 Journal of Traumatic Stress 541-556.

[78] K Kaniasty, “Predicting Social Psychological Well-being following Trauma: The role of Post-disaster Social Support” (2012) 4 Psychological Trauma: Theory, Research, Practice, and Policy 22-33.

[79] A Vicary and R Fraley, “Student Reactions to the Shootings at Virginia Tech and Northern Illinois University: Does Sharing Grief and Support Over the Internet Affect Recovery?” (2010) 36 Personality and Social Psychology Bulletin 1555-1563; M Dutta-Bergman, “Community participation and Internet use after September 11: Complementarity in channel consumption” (2006) 11 Journal of Computer-Mediated Communication, article 4. Available at http://jcmc.indiana.edu/vol11/issue2/dutta-bergman.html (accessed 7 August 2012).

[88] B Trezise, “Touching Virtual Trauma: Performative Empathics in Second Life” (2012) 5 Memory Studies 392-409.

[91] C Calvert, “The Privacy of Death: an Emergent Jurisprudence and Legal Rebuke to Media Exploitation and a Voyeuristic Culture” (2005) 26 Loy L.A. Ent L. Rev 133-169

[95] Facebook, “Statement of Rights and Responsibilities” (n.d.) available at http://www.facebook.com/legal/terms (accessed 30 March 2013).

[96] For example, Google’s terms and conditions state that “We may review content to determine whether it is illegal or violates our policies, and we may remove or refuse to display content that we reasonably believe violates our policies or the law. But that does not necessarily mean that we review content, so please do not assume that we do”. Google, “Google Terms of Service” (2012) available at http://www.google.com/intl/en-GB/policies/terms/ (accessed 31 March 2013)

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download EOD Lesson 3 Outline (including graphs and source citations)

Concepts:

incentivespublic choice thoerypublic good
bureaucracycomparative advantagemoral hazard

Standards:

Standard 4: People respond predictably to positive and negative incentives.

Standard 16: There is an economic role for government to play in a market economy whenever the benefits of a government policy outweigh its costs. Governments often provide for national defense, address environmental concerns, define and protect property rights and attempt to make markets more competitive. Most government policies also redistribute income.

Standard 17: Costs of government policies sometimes exceed benefits. This may occur because of incentives facing voters, government officials, and government employees, because of actions by special interest groups that can impose costs on the general public, or because social goals other than economic efficiency are being pursued.

Lesson Overview:

“The fury of nature seemed to cause the institutions on which our society is based – those of government, commerce, and civil society – to crumble. First responders appeared overwhelmed as accounts of widespread looting, vandalism, theft, assault, and murder headlined newspapers and as the images of our fellow citizens literally swimming for their lives appeared on television and computer screens. The slow and seemingly inept responses of government at all levels both in preparation for and recovery from the storm infuriated Americans.” (Chamlee-Wright & Rothschild, 1)

The fury of nature followed by the fury of citizens railing at government ineptitude – in this case, the aftermath of Hurricane Katrina – is a disturbingly familiar scenario. The frequency of public dissatisfaction with government response to major disasters raises two important questions for the well-being of our republic: “Is public fury justified?” and, perhaps more importantly, “Is railing at government the best approach to ensuring effective action in the next disaster?” This lesson examines contemporary expectations of government in the wake of disaster and the prevailing assumption that only government is big enough to deal with major disasters by first looking at those tasks that government does well. Then, we will turn our attention to when and why government is unlikely to meet our expectations.

Because human society has shown great resiliency through the ages (See Introduction), we can learn from those instances where it has not. Events like Hurricane Katrina, which spawned the “storm [that] infuriated Americans” referenced above, provide a body of evidence to help us evaluate what government can do when its citizens are struck by disaster. Implicit in asking what government can do is a second question: “What can’t government do?” Also implied is the assumption that government should do only those things it can do well, and should not do those things for which it is, by nature, ill-suited.

Historically in the United States, disaster response and relief has not been considered the responsibility of government, and most especially not the federal government. People caught in natural calamities turned to family and to community organizations like churches and private charities for support. State and local governments readily engaged in rescue operations and the task of re-establishing and enforcing civil order when necessary, but the federal government maintained a hands-off stance until the early 20th century. The 1906 San Francisco earthquake and fire prompted the first-ever federal allocation of disaster aid. Congress appropriated $2.5 million* in disaster aid – a small gesture compared to modern FEMA response – to cover the cost of food, blankets, tents and other relief supplies requisitioned from West coast Army depots. While President Roosevelt telegraphed California Governor Pardee and San Francisco Mayor Schmitz to express concern and offer “assistance,” the assistance consisted mainly of sending Secretary of Commerce Victor Metcalf to the city to keep the White House informed of developments. Tellingly, Roosevelt declined assistance and donations from abroad, saying that the U.S. had sufficient resources, and he directed offers of domestic assistance from such sources as the city governments of Chicago, Boston, New York, and from John D. Rockefeller and Andrew Carnegie to go to the Red Cross rather than to the notoriously corrupt San Francisco city government. (Strupp, 18-23)

From that small initial aid “reimbursement,” the federal role in disaster relief has grown – some would say exponentially. In 1950, Congress gave the President the power to designate “disaster areas.” The designation triggers the availability of federal funds for rebuilding infrastructure and public buildings like schools, courts, libraries, police and fire departments, and other public institutions. In 1969, the Disaster Relief Act made federal aid available to individual citizens. In 1979 President Jimmy Carter issued the executive order that created FEMA, the Federal Emergency Management Administration.

The disasters of the 20th and 21st centuries can be studied as real world experiments, generating data to analyze and evaluate how effective the government is in the growing number of disaster-relief roles it has taken on. We have chosen Hurricane Katrina as the case-study focus of this lesson. (Please see entry in the “Catalogue of Disasters” appendix to the Introduction for background data on Hurricane Katrina.) Katrina may seem unique in our contemporary national experience of major disasters, but in the larger historical perspective, this is true only in the specifics of time and place. The story of inadequate and failed government response has been told and retold, and the anecdotes circulating in the media and on the Internet are disturbingly like those from the last disaster and the one before that. We recognize that the nature and quality of the information to be gleaned from anecdotes varies and that care must be taken when using anecdotes as evidence. To that end, the Katrina stories selected to illustrate points of analysis in this lesson are those we believe to be representative of modern government disaster response and relief.

The key points in Lesson 3 are divided into two categories. Part 1 identifies disaster-related activities in which the benefits of government action clearly do outweigh the costs. Part 2 uses economic analysis to explain the obstacles to success in the disaster-relief activities where government frequently falters.

_______________

*(Comparable to $300 million (nominal GDP per capita) or $1 billion (relative share of GDP) in 2006 dollars.) It is worth noting that, to some extent, this aid can be considered a case of the federal government’s hand being forced. The acting commander of the Presidio, Army General Frederick Funston, ordered his troops into the city to begin rescue operations without contacting either his superiors or city officials. Additionally, he requisitioned and distributed supplies from West coast military depots before being given authority to do so. Although he did subsequently gain after-the-fact permission from Secretary of War Taft, the eventual allocation of aid by Congress does have the air of being essentially a “reimbursement” for the expenses he initiated.

Key Points

Part 1: What Government Should Do

1. The challenge for government in disaster response and relief is determining when it should take a “hands-on” role and become actively involved, and when the goal of recovery is best-served by stepping back in favor of other institutions better suited to the task.

  • The rule of rational choice directs decision-makers to choose the alternative with the greatest excess of benefits over costs. This rule applies not only to private decision-makers but also to government decision-makers: Governments should undertake those activities for which the expected benefits outweigh the expected costs.
  • There is general agreement among economists that those instances in which the benefits of government action outweigh the costs include:
    • maintaining and enforcing the rule of law, and
    • providing public goods.
      • Economists distinguish between “public goods” and “publicly-provided goods.” Both are paid for by government spending of tax and other revenues. Public goods are those that would not be provided by private firms because they are non-rivalrous (consumption by one person does not diminish consumption by others) and non-exclusive (non-payers, or “free riders” cannot be excluded), making them not profitable. National defense is an example.
      • Many other publicly-provided goods might well be profitable for private firms in the absence of government provision, but we have, collectively, made a decision to pay for their production with public funds. Public schooling is an example.

2. As institutionalized in the United States, the basic role of government is to establish and enforce the “rules of the game” by maintaining civil order and the rule of law.

“The robustness of . . . markets and civil society depends crucially upon the social rules we tend to take for granted – rules of private property, the rule of law, contract enforcement, and basic rights of self-determination. As crucial as these rules are for day-to-day interaction, they are all the more important to ensure in the wake of disaster. [emphasis added]. . . By enforcing property rights and contracts or restraining inflation, for example, governments help to clarify and enforce ‘the rules of the game’ for our daily interactions with one another. When good rules such as these are clear and well-enforced, the signals that emerge in markets and other social interactions tend to be robust and allow the interactions between members of society to be more fruitful and peaceful. Citizens of liberal democracies tend to take these ‘rules of the game’ for granted, but they are vital to our daily interactions and overall well-being.” (Chamlee-Wright, 15-17)
  • The immediate benefits of using military and police presence to keep the peace, deter violence, and protect property are quite clear, but it is also important to recognize the long-term benefits of re-establishing civil order.
    • By enforcing the rule of law when disaster strikes, government provides a stable foundation of expectations upon which individuals can make choices among the alternatives they face – even, and especially, when their alternatives are limited or undesirable.
    • When the rule of law is uncertain and when the rules of the game are inconsistent or subject to constant change, people and businesses delay decisions about whether to leave or return to the disaster area, whether to try to re-establish their businesses or give them up, whether to move back or move away.
    • Re-establishing and maintaining the rules of the game stabilizes social institutions like schools and churches that are essential to attracting people and businesses back into disaster-damaged communities
    • Restoration of civil order empowers non-governmentresponse, through which other institutions begin to re-establish the normal activities of the community.
  • On some occasions, government can help to re-establish the rule of law and civil order by temporarily altering the old rules of the game to fit the needs of the current situation.
    • The April 18, 1906, San Francisco earthquake and subsequent fire was one of the greatest natural catastrophes in North American history. (See addendum to Introduction for details of the disaster devastation.)A quick change in the rules of the game by California Governor George Pardee helped to prevent the financial collapse of a major American commercial center.Pardee declared every day between April 18 and June 3, 1906, a legal holiday.Since banks may not operate on legal holidays, he made it possible for businesses to postpone payment dates. His insightful action prevented the financial chaos that might have ensued in the initial panicked realization that most business and banking records had burned up. By June, banks and businesses were able to reconstruct records and reconnect with customers to set accounts right. (Strupp)
    • More recently, the federal government’s decision to change the rules of the game in the market for fuel helped to prevent a gasoline crisis in the aftermath of Hurricane Katrina.
      • The combined impact of Hurricanes Katrina and Rita was to greatly reduce American oil refining capacity.At the peak of the shutdowns, refineries were processing 5 millions of barrels of oil less per daythan before the storms hit.(For statistics detailing the damage to Gulf Coast production capability, please see the Case Study: “The Gasoline Market Coped with Supply Shock . . .” in Lesson 2.)
      • Mercatus analyst Alastair Walling argued that the federal government helped to avert an oil crisis simply by getting out of the way.
Case Study:When Government Hands-Off Helps: Averting a Katrina Oil-Crisis

“. . . [W]hile the media fixated on the federal government’s failures, they ignored the quiet successes achieved by the regulatory restraint shown in the wake of the disaster. At both the state and federal level, government waived or relaxed many regulations whose strict upholding would have imposed additional hardship on the people of the Gulf Coast and hindered recovery efforts.

. . . Gasoline evaporates easily during the warm summer months and, subsequently, produces more smog. In order to remain compliant with environmental regulations, refineries produce blends of summer gasoline that, although harder to make, evaporate less easily than winter gasoline. As Hurricane Katrina was knocking out refining capacity left and right, previously refined stocks of perfectly good, but at the time illegal, winter gasoline sat waiting. The EPA . . . simply authorized the early use of winter gasoline, which instantly increased the gas supply available to the market.The early release of winter gasoline may not have been enough if inadequate supplies of diesel fuel, combined with increased demand associated with trucking relief supplies to the Gulf Coast, ended up immobilizing the heavy-duty tanker trucks needed to transport it. Worried that a diesel shortage might immobilize transportation, the EPA also lifted restrictions on high-sulfur diesel fuel . . . [used by trucks carrying relief supplies].

. . . Refiners design boutique fuels for use in markets that cannot meet federal air quality standards without specialty fuel. These markets may be as small as a single city or as large as most of Southern California . . . . While boutique fuels may produce cleaner air, they have definitely fractured the national market for gasoline. If stocks of a particular boutique fuel run low in its given market, then suppliers cannot simply ship in non-conforming blends from other markets.

. . . Following Hurricane Katrina, the EPA moved quickly to issue waivers suspending boutique fuel requirements. Not only did this make gasoline fungible again, but it opened the American market to foreign refiners, who usually do not produce EPA-mandated fuels. (Walling, 10-11)

3. A second role for which government institutions are well-suited is providing the public goods that form the infrastructure of a community. In disasters, public goods may include such activities as search-and-rescue operations and evacuation coordination.

  • The non-rivalrous, non-exclusive characteristics of true public goods makes them subject to the “free-rider” problem and thus not profitable for private producers.
    • Exclusivity, the ability to withhold from people the benefits of a good or service for which they have not paid, is the source of entrepreneurs’ profit and of their incentive to produce. When a good or service is non-exclusive, private firms are unlikely to produce it, because free-riders can benefit without paying the producer. Government, however, can compel payment in the form of taxes.
    • The classic example of a true public good is national defense: It is non-rivalrous, meaning that the amount of national defense provided to one citizen does not reduce the amount available to others. And, national defense is non-exclusive; once it has been produced, it cannot be withheld from those “free riders” who choose not to purchase.
    • It is also likely that as a practical matter, search and rescue operations are a public good. In principle, one can imagine private search and rescue firms who, for subscription fee, or payment for services rendered, could provide many of the services now provided by the Coast Guard.
      • Indeed, when it comes to protection of physical property, many firms offer such services, for example private firms that tow into ports boats that have become disabled at sea.
      • But when it comes to the preservation of human lives, it is unlikely to see such services on a widespread scale. Consider the owner of such a firm who receives a rescue call that happens to come from a non-subscriber or from someone who cannot afford the charges. Could the owner really bring himself to let a person die under such circumstances? And even if he could, what would be the legal (or even the public relations) ramifications of doing so? Under such circumstances, many in the community would simply refuse to subscribe, reasoning that they are likely to be rescued in any event. Thus, as with national defense, there appears to be a valid role for the government offering such services, paid for out of mandatory taxes.

News coverage of police and national guard putting their own lives in danger to rescue and protect citizens in the chaos of Hurricane Katrina vividly memorialized the important functions that government performs in times of disaster – and perhaps we need to be reminded of the value of the civil order and stable rule of law that we have the luxury of taking for granted. But we began this lesson with reference to the fury of nature being followed by the fury of citizens at their government’s ineptitude. Part 2 of this lesson considers the source of citizen’s fury. In emergencies, we have a tendency to call on government to do things we do not expect in normal times, and in doing so, we often overlook the lessons of the rule of rational choice.

Part 2:  What We Should Not Ask Government to Do and Why

4. Based on the rule of rational choice, government should not undertake in disasters those activities for which the benefits do not outweigh the costs – activities like getting supplies to victims and rebuilding disaster-stricken communities.

  • Government’s poor performance in disaster relief is best explained not by reference to venal and/or incompetent officials but instead by the centralized nature of government and the incentives that accompany government decision-making.
  • Economic analysis of the dismal record of federal, state, and local agencies in disasters like Hurricane Katrina suggests that part of our disappointment is an inevitable result of expecting government to perform functions for which it is ill-suited. Public choice economists have identified key factors that explain why government cannot – and, perhaps, should not be expected to – perform well the growing list of relief and rebuilding tasks it has been assigned over the last century:
    • Centralized institutions like governments cannot efficiently gather, process, and act upon the widely dispersed, localized information that is key to disaster response.
    • Government’s difficulty harnessing knowledge is exacerbated by bureaucratic institutional structure.
    • Government lacks an effective feedback mechanism for evaluating whether their disaster relief efforts are succeeding in meeting the needs of disaster victims.
    • The incentives that face managers and employees in government agencies reduce effectiveness in disaster response.
    • Government attempts to shelter people from disaster or to ameliorate their losses afterwards create moral hazards and perverse outcomes.
    • Government disaster-relief programs are prone to unintended consequences.

5. Government agencies have difficulty providing for people’s wants and needs in disaster because they are unable to overcome what economist Friedrich von Hayek famously identified as the knowledge problem – that “. . . knowledge of the circumstances of which we must make use never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess . . . . “(Hayek, 519-20)

  • Centralized disaster response thus faces two significant obstacles:
    • The difficulties of gathering and communicating the fragmented, chaotic, and dispersed information from the disaster-stricken area to those responsible for responding
    • People who are familiar with the local conditions, needs, and available resources will not be involved in the decision-making. (Hayek, 521-24)
  • Economists Russell Sobel and Peter Leeson of the non-profit Mercatus Center at George Mason University illustrate Hayek’s contention that centralized direction cannot overcome the knowledge problem as they describe FEMA relief and recovery efforts after Hurricane Katrina.
Case Study:

FEMA Failure – More Than Bad Leadership

“. . . Information is fragmented, diverse, and often contained in inarticulate forms, held separately and locally by the many individuals who compose society. . . . [T]he foremost obstacle that every effort at social coordination must overcome is somehow tapping into this dispersed information and processing it in forms that individuals can use to mutually achieve their ends.

. . . We argue that natural disaster management is no different in this regard than coordinating individuals in ‘normal’ economic contexts. Following a natural disaster there are ‘relief demanders’ – individuals who desperately need disaster relief supplies, including evacuation, food, shelter, medical attention, etc. On the other side, there are ‘relief suppliers’ – individuals ready and willing to bring their supplies and expertise to bear on the needs of relief demanders. On both sides of this ‘market’ information is decentralized, local, and often inarticulate. Relief demanders know when relief is needed, what they need, and in what quantities, but not necessarily who has the relief supplies they require or how to obtain them. Similarly, relief suppliers know what relief supplies they have and how they can help but may be largely unaware of whether relief is required and, if it is, what is needed, by whom, in what locations and quantities. (pp. 2-3)

. . . When government substitutes central planning for markets, essential information is generated in an untimely fashion, generated inaccurately, or not generated at all. Because of this, central planning cannot effectively coordinate decision making among numerous and dispersed individuals with different endowments, wants and needs.

. . . There is no reason to think that FEMA, or any other government agency charged with FEMA’s task, is immune to the information problem.

. . . Our finding that an inability to overcome the information problem is the root cause of government’s failure to effectively manage natural disaster relief casts doubt on recent explanations of FEMA’s failure following Hurricane Katrina. One strand of argument, for example, suggests that an unfortunate succession of ‘bad directors,’ culminating in the leadership of former FEMA director Michael Brown, is the reason for this failure. Our analysis suggests that although incompetent directorship may exacerbate government’s inability to effectively manage natural disasters, it is of subsidiary importance to Hayek’s knowledge problem. . . . Even the most benevolent and effective of directors cannot overcome this problem, which stems from inherent organization of government management, which is centralized.

. . . [B]ad leadership does not help, but neither does it explain the core failure of the system. Replacing Stalin with Mother Theresa or Albert Einstein would have been no more help for the Soviet economy than replacing Michael Brown or the current FEMA director with one of these individuals would be.”  (Sobel &Leeson, “The Use of Knowledge,” 2, 3, 21-23)

  • The United States is one of many economies that have achieved high levels of well-being by choosing not to rely on central planning. We have created a system that incorporates Hayek’s insight – government is inherently incapable (not unwilling) of overcoming the obstacle of dispersed economic information. Logically, we should also recognize that the knowledge problem that restricts government effectiveness in normal times does not disappear in crisis. Instead, it escalates.
    • Beyond the obvious difficulties imposed by damage to transportation and communication infrastructure, disasters exacerbate the knowledge problem by further fragmenting information. Additionally, disaster conditions vary considerably from locality to locality, increasing the volume of critical information.

6. Government’s inability to effectively harness knowledge and information is further exacerbated by bureaucratic institutional structure.

  • Bureaucratic structures are characterized by detailed procedures, strict protocols, and line-of-command decision-making.
    • Nobel laureate Gordon Tullock reasoned that bureaucracy is an effective (some would argue, necessary) mechanism for centrally-directed institutions where people’s choices are not constrained by competition for profit, as they would be in a market.
      • One of the problems inherent in carrying out government policies is to organize subordinates so that they will behave as their superiors want them to behave – that is, by contributing to the goal that has been identified through the political process. Bureaucratic structures create incentives for employees to contribute: benefits accrue to those who follow procedures and protocols and costs are borne by those who do not.
  • While the bureaucratic incentive structure may, indeed, be necessary to the functioning of government, it is a cumbersome method of dealing with the knowledge problem and – as was clearly evident during Hurricane Katrina – inevitably slows disaster response.
Case StudyThe Knowledge Wedge:Note to FEMA – Turn on the TV!“From the view of political actors charged with relieving disaster, there is no disaster to respond to until the President, who is reached in the final stage of the bureaucratic procedure, has officially declared as much. This is true even if a disaster requiring assistance has already struck; the disaster is readily acknowledged and visible in the media, etc. Unavoidable bureaucracy inherent to government management creates a separation between what might be called ‘private knowledge’ of disaster and ‘political knowledge’ of the same disaster.This bureaucracy-created ‘knowledge wedge’ severely limits the goals that can be successfully achieved using government. . . . The more monumental the task in terms of coordination, the greater the problem the knowledge wedge that bureaucracy generates becomes, and thus the less likely government is to effectively complete the task. Since . . . the coordination problem to be solved increases as the division of knowledge increases, this means that for endeavors in which information is more fragmented and localized, such as natural disaster relief management . . . government is an increasingly less effective tool to accomplish the goal.

The bureaucracy-created ‘knowledge wedge’ . . . explains why, though the citizens of New Orleans, the media, and countless others were aware of the impending and eventual disaster caused by Hurricane Katrina, key government . . . figures were not . . . . The secretary of the Department of Homeland Security, Michael Chertoff, for example, did not declare Hurricane Katrina an ‘incident of national significance’ until 36 hours after it made landfall . . . despite the fact [that] . . . two days before Katrina’s arrival the National Hurricane Center predicted Katrina would hit the Gulf Coast.

. . . As a useful point of comparison, contrast the government’s ability to learn about disaster with the private sector’s information . . . . ‘The private-sector planning began before Katrina hit. Home Depot’s ‘war room’ had transferred high-demand items – generators, flashlights, batteries and lumber – to distribution areas surrounding the strike area. Phone companies readied mobile cell towers and sent in generators and fuel. Insurers flew in special teams and set up hotlines to process claims.” (Sobel and Leeson “The Use of Knowledge. . . ”7-9)

7. The political process lacks an effective feedback loop from victims to the decision-makers responsible for allocating resources in a disaster.

  • The information necessary to determine which programs are working, which are not, and what other resource uses would be valuable is not communicated directly from consumer (disaster victims) to supplier (government). Instead, decision-makers have only the (insufficient and mostly incomplete) information that comes to them through the political process.
    • While we might reasonably expect that government decision-makers have good information about the costs of the programs they create, it is hard to imagine how they could be expected to have accurate knowledge of the benefits or of the potential benefits of alternatives; information that is communicated by price in the private sector.
    • The results of government agencies facing neither profit nor loss from their allocation of resources are the all-too-familiar stories of ineptitude that disaster relief spawns.
Sample Illustrations: No FeedbackIt Seemed Like A Good Idea At the TimeGulf Coast relief fiascos in 2005 exemplified the problems government agencies face because of inadequate knowledge and ineffective feedback – problems that refuse to subside in the face of well-meaning compassion. Consider, for example, FEMA’s well-intentioned effort to provide temporary housing for the homeless. It seemed like a good idea to move them outside the devastated area. It resulted in trailer parks that went “virtually unused.”
  • FEMA spent $1.3 billion on 95,000 trailers for hurricane victims, and in some cases $38,000 per lot to make parks trailer ready – double the cost of the trailers themselves. Because FEMA chose to locate the trailers in remote places, away from cities and jobs, FEMA . . . [also planned] to spend millions to cook meals and provide bus service and security for trailer parks. In the not-too-distant future, FEMA will turn around and pay yet again to tear the parks down. FEMA’s incredible misallocation carries little penalty or consequence for FEMA decision makers . . . . In fact, FEMA’s failure was rewarded with billions of additional dollars in funding for the agency’s continued work.” (Sobel & Leeson, “The Use of Knowledge . . .,” 19-20)

Sometimes, it does not take rocket science to figure out what disaster victims need – ice after a hurricane on the Gulf Coast in August, for example. Just knowing “what” however, does not solve the allocation problem. The feedback necessary for the seemingly simple task of getting ice to New Orleans did not happen. Though these failures seem funny after the fact; at the time, it was simply a waste of resources and a missed opportunity to help victims.

  • “FEMA ordered 182 million pounds of ice to be delivered to stranded families and aid workers. Yet some of the ice ended up in Portland, Maine, more than 1,500 miles away from the disaster area. The cost of shipping and storing the 200-plus truckloads of the Portland-bound ice was $275,000.
    . . . NBC News reported that it had found trucks full of ice in . . . Maryland, Missouri, Georgia, and Tennessee. Some of the trucks had been driving and/or sitting idle with their full loads for two weeks.
  • . . . A truckload of ice even ended up at the Reid park Zoo in Tucson, Arizona. The driver of the ice truck got so many conflicting commands from government relief officials that he ended up traveling through 22 states without ever delivering a single bag of ice to a hurricane victim. Instead, he ended up donating it to the Tucson zoo to be enjoyed by the polar bears.” (Sobel & Leeson, “Flirting . . .” 5)

While it is certainly true that private firms also make mistakes, the key point is that they bear a cost for their mistakes, and FEMA does not. Having to “donate” misallocated ice to polar bears would reduce profits for a private supplier and that is a strong incentive to improve procedures. FEMA officials face no such incentive.

It bears repeating here that these scenarios cannot be explained away by laughing at officials’ “stupidity” or lack of “effort.” Even efforts to learn from past mistakes are often doomed to ludicrous failure by the lack of feedback and the ever-changing specifics of time, place, and event. Look at what happened when Florida Emergency Management officials tried to learn from Hurricane Katrina, determined not to get caught without ice “next time.”

  • “Minneola – Need some ice for that big Super Bowl party? How about some frozen daiquiris? Or maybe you just miss the ice and snow from up North. Whatever the case, here’s your hookup:
    • The small Lake County city is looking for ways to use nearly 600,000 pounds of ice cubes – 15 truckloads in all – to be delivered . . . by the state Division of Emergency Management. The chilly delivery is part of a colossal effort to get rid of nearly $2 million in relief supplies . . . .
    • . . . Altogether, the state is storing about 225 truckloads, or a total of 9 million pounds, of bagged ice cubes in two large warehouses . . . . The glacier-sized supply was left over from relief efforts after Hurricane Wilma in 2005.
    • Emergency officials held onto the unused ice, expecting a busy hurricane season last year. That never happened. The cost of keeping almost 5,000 pallets of bagged ice in cold storage is about $90,000 a month.” (Sargent)

8. As disaster response extends beyond immediate rescue and relief, incentives for both elected and appointed government workers result in increasingly poor resource use.

  • Public choice theory, the application of economic reasoning tools to political decision-making, teaches us that government disaster-relief activities are prone to serve the wants and needs of politicians rather than those of disaster victims.
    • The key insight of public choice theory is that elected decision-makers’ pursuit of self-interest is dependent upon their ability to gain and remain in office.
    • Regardless of how altruistic or depraved a politician’s self-interest, he cannot pursue it in the political arena unless he is in office. This reality creates strong incentives for politicians to be most responsive to those individuals and groups with the greatest ability to affect their political tenure. Thus, when government relief efforts extend beyond the immediate emergency, they tend to be politically allocated.
  • Unelected government employees also face incentives that frustrate effective disaster response. Because they are not motivated by profit – their civil service salaries are unaffected by any calculation of the amount and effectiveness of the assistance they provide – they have little incentive to respond effectively and efficiently to the needs of disaster victims.
    • It is important that the analysis of incentives not be read as primarily an indictment of government workers’ character.
    • Loyal, hardworking, caring employees know that they are likely to be commended for carefully following and documenting procedures and criticized for taking risks – incentives arguably ill-suited to disaster conditions.
    • On the other hand, employees know that they risk reprimand for skipping steps, abandoning procedures, and trying something new and different, despite the urgency of abnormal conditions.
  • Accountability and the close-scrutiny and second-guessing to which public agencies are subject make them prone to “type two” errors, errors that result from being overly cautious.
Case Study: Perverse Incentives – FEMA and Katrina: A Comedy of (Type 1 or Type 2?) ErrorsEconomists distinguish between two types of policy mistakes: ‘type-one’ and ‘type-two’ errors. Type-one errors are mistakes that result from not being cautious enough. . . . Type-two errors, on the other hand, are mistakes that result from being too cautious. . . . [P]ublic choice theory informs us that government agencies like . . . FEMA are overly prone to commit type-two errors.

. . . Both type-one and type-two errors can result in injuries or harm to the public. However, the visibility and public backlash are likely larger for type-one errors. . . .[I]f a disaster is declared and FEMA jumps the gun by getting involved immediately, it may commit a type-one error. Because type-one errors are overt mistakes, they are highly visible and are therefore accompanied by a higher likelihood of admonishments from citizens, the press, and possibly, other government agencies.

Suppose, for example, that FEMA allows rescue workers to enter a disaster zone and those workers get hurt. FEMA could be blamed for letting them in prematurely. Thus, bureaucratic hesitancy has always been an operational assumption of FEMA. Indeed, as the Senate report points out, ‘FEMA has a longstanding policy of not putting its emergency responders in the path of a storm so that they will not be in need of rescue themselves.’

Type-two errors, in contrast, are less visible, and thus less likely to result in admonishment. . . . If FEMA waits too long to enter a disaster zone, it may be blamed for acting too slowly as it was in the case of Katrina. But that blame is likely to be less than what FEMA might receive if it entered a disaster zone immediately, before a plan was worked out, and consequently bungled its relief effort in a more overt fashion. FEMA . . . has an incentive to delay action even if more disaster victims are harmed by its not entering than would be harmed if it entered prematurely. Victims lost before FEMA enters because it delays action are less obviously linked to FEMA’s lack of action.”  (Sobel & Leeson, “Flirting . . . “ 6-7)

  • Additionally, some of the ineptitude and escalating cost of government relief programs can be explained by the incentives associated with what the late Nobel laureate Milton Friedman famously called the “other people’s money” syndrome.
    • Friedman identified four categories of spending, noting that the incentive to get value for money is very high when you spend your own money on yourself, but that it falls when you spend your own money on someone else or especially when you are spending other people’s money on someone else. (See appendix 1 following this lesson: “The Other People’s Money Syndrome,” for Friedman’s four categories of spending and how they help us to understand government inefficiency in the wake of disaster.)

9. Government programs to shelter people from disaster or to help victims afterwards tend to be characterized by escalating costs because they create moral hazards and perverse “Good Samaritan” effects.

  • A moral hazard exists when people are shielded from the full costs of risk, thereby creating an incentive for them to engage in more risk-taking behavior. While moral hazards occur in both the private and the public sector, they are more likely to persist in public sector programs.
    • Insurance is the classic example of an industry in the private sector that is affected by moral hazards. At the margin, insurance creates incentives for people to be less careful because their losses are covered by insurance.
      • However, because they are in business to make profit, private insurance companies are well aware of moral hazard. They incorporate their awareness in rate calculations and in pre-requisites for coverage – smoke detectors as a condition for home-owners insurance, for example
    • Government programs do not have the incentive of profit, so there is no incentive to mitigate moral hazards. Government-funded disaster insurance programs, for example, continue to experience escalating real costs as a result of their inability to discourage building in disaster-prone areas of the country.
  • The “Good Samaritan” paradox refers to the distortion in decision-making that occurs when people come to expect generous disaster assistance.
    • The intention of assistance is to help people get through an unexpected tough time and regain their former independence. The perverse outcome of institutionalizing ongoing government disaster relief is to increase the number of people who make choices knowing that the availability of government assistance reduces their risk of loss.
Sample Illustrations – Moral Hazards & Good Samaritan Effects#1 – Relief Encourages Risky BehaviorIn 1998 a team of American Geophysical Union (AGU) researchers investigating the dramatic rise in U.S. disaster relief costs from 1970 – 1998, were startled to find that Americans were actually moving into regions at high risk for natural disasters.“States most affected by the costs of hurricanes (Florida, North Carolina, and Texas) and earthquakes (California and Washington) show the largest increase in both population and revenue. More people are moving into coastal areas that are vulnerable to natural hazards – particularly earthquakes on the west coast and hurricanes on the east coast.” (van der Vink, 553)Two important factors that researchers noted in concluding that people were not moving out of ignorance were that: 1) there had been no significant change in the number or intensity of the weather phenomena producing disasters, and 2) it was well known throughout the U.S. that hurricanes, tornados, earthquakes, and floods generally occur where we would expect them to occur – on barrier islands, flood plains, hurricane coasts, and fault zones.

#2 – The Good Samaritan Paradox: Federal Flood Insurance

In 1968, Congress created the NFIP or National Flood Insurance Program for homeowners living in river flood plains and flood-prone coastal regions. The programs’ goals were: 1) to reduce the amount of flood-disaster relief the federal government was paying by substituting an insurance program, and 2) to make a concentrated effort to encourage future development in other than flood-prone areas.

In the summer of 1993, serious summer flooding devastated the midwestern United States. By that time, 2 ½ million NFIP policies had been sold, a total of $200 billion of insurance, but the bill for flood relief was not covered by insurance. Writing in Regulation Magazine a year after the floods, Sheldon Richmond explained the paradox faced by the Good Samaritan American taxpayers.

“Federal coverage is voluntary, and only 13 percent of eligible property owners [were] . . . covered. People forgo coverage either because they are fatalists or because they are counting on federal relief anyway. [emphasis added] In past years the federal government has made relief payments to property owners without insurance . . . People who did not have flood insurance when the Midwestern rivers flooded can still get money from FEMA’s general fund . . . as long as they buy a NFIP policy. In effect, they get insurance after the fact.

. . . [M]ore than a third of total payouts have gone to 3 percent of all claimants, so-called ‘repetitive loss’ cases, since the policy allows for multiple claims without an increase in premium. Most of the money has gone to owners of beachfront homes, not to residents in riverfront areas.

. . . Since there is private insurance for other risks, one naturally wonders why a federal flood insurance program is needed at all. Federal officials and the insurance industry give the stock answer that floods are not an insurable risk, which presumably means premiums would be prohibitively expensive if not infinite. . . . [I]f an activity is so expensive that private insurers won’t underwrite it or will insist on very high premiums, that is market information that ought to be heeded . . . Private insurers would have no incentive to understate the risk. But bureaucrats have such an incentive. The bureaucrats do not risk their own money, and their agency can’t go out of business. The lower the premium, the more people will buy their policy and the bigger and more prestigious the program will be. But the lower premium encourages more people to locate in dangerous areas, exposes more assets to risk, and increases the economic loss from natural disasters.” (Richmam)

10. Disaster-relief windfalls are associated with increases in corruption.

  • Recent studies by development economists have established the relationship between natural-resource and foreign-aid windfalls and increases in corruption. Disaster relief creates similar windfall conditions and similar increases in corruption.
  • Intrigued by this relationship, University of West Virginia economists Peter Leeson and Russell Sobel studied the effect of FEMA-provided disaster relief on public corruption in the United States. They found a positive relationship between the amount of FEMA disaster relief received and public corruption in the state.
    • Defining corruption as “political officials’ abuse of public authority for private gain,” the researchers used data from the Department of Justice on corruption-related federal criminal convictions per state from 1990-99.
      • They found that “. . . [An] additional $1 per capita in average annual FEMA relief is associated with a 1.9 percent increase in public corruption in the average state.Alternatively, moving from a state that has experienced no natural disasters and received no FEMA relief to the average state in our sample increases public corruption 17 percent.”(Sobel & Leeson, Weathering . . . , 16)
Disaster Relief and Corruption“Between 1990 and 2002 America convicted more than 10,000 public officials of corruption-related crimes. The distribution of corrupt politicians and bureaucrats, however, was far from even. America as a whole averaged four corruption-related convictions per 100,000 residents. Mississippi, Florida, and South Dakota averaged 7.5. Utah, Arizona, and Nebraska, on the other hand, had less than half the U.S. average.Over the same period, 599 natural disasters struck America. Like with corruption, these too were unevenly distributed. Oddly, though, the geography of natural disasters maps the geography of corruption extremely well. Fifty-six of these natural disasters occurred in Mississippi, Florida, and South Dakota. Only 13, however, occurred in Utah, Arizona, and Nebraska.The positive connection between public corruption and natural disasters holds throughout America. . . .The relationship is clearly positive: states hit by more natural disasters are more corrupt.. . . Disaster relief windfalls open up new opportunities for bribery, for instance by privileging private vendors charged with administering post-disaster supplies in return for illegal side payments. . . . Disaster relief windfalls also create new opportunities for public officials in charge of disaster relief funds to skim incoming resources for themselves or divert them to their friends. The chaotic and confused atmosphere typically created in the wake of a major natural disaster facilitates public officials’ ability to do this.” (Sobel & Leeson, “Weathering . . . “ 1-3)
  • (Importantly, Sobel and Leeson are not comparing public corruption to private fraud or denying that fraud in the private sector is absent during disaster. Nor are they arguing that public corruption is inevitably associated with government spending. The important variable in their study is the windfall of FEMA relief.
    • The researchers also studied the relationship between corruption and changes in non-FEMA related state and federal government spending and found no significant increases in corruption.)

11. Government disaster-relief efforts are prone to unintended consequences. Just because a program is well-intentioned does not guarantee that it will produce the desired outcomes.

  • Disorganization, policy changes, and conflicting policies create uncertainty, which discourages private and commercial recovery efforts.
  • Well-intentioned government-financed assistance that persists beyond the immediate emergency hampers private and commercial recovery efforts. Once the immediate crisis point of a disaster has passed and basic human needs such as food and shelter are being met, government provision of goods tends to slow down recovery.
Sample Illustrations: “Signal Noise”#1: When Regulation Gets in the Way of ReliefA year and more after Katrina, the vast majority of Americans remain dissatisfied with the federal government’s response to Hurricane Katrina and the subsequent snail-paced recovery. Emily Chamlee-Wright, economics professor at Beloit College, and Daniel Rothschild, Associate Director of the Global Prosperity Initiative, proposed the explanation that government disaster policies undermine community recovery. “Disastrous Uncertainty,” concludes that when communities fail to rebound, the problem may be that government is doing too much, rather than not enough. They argue that rebuilding is likely to be more rapid and sustainable if civil society, rather than government, takes the lead. Their study focuses on the “signals” that guide decision-makers in civil and commercial society and they contend that government intrusion slows community disaster recovery by introducing significant “signal noise.”

“After the storm, many parents faced the daunting task of navigating the system of relief services and beginning the demolition process while caring for young children. The temperatures were high, stress levels were higher, and the lines were long. But professional childcare was in short supply. Some daycare providers did what they could to open their doors to disaster victims in the weeks and months that followed, but state regulators fined them for failure to comply with child-teacher ratios and other requirements.The parents sent a clear signal – a demand for much needed, safe, and affordable childcare. Childcare professionals easily and correctly read their signal. The regulatory environment, which was not crafted for a post-disaster context, caused signal noise that prevented childcare professionals from meeting this need.” (Chamleee-Wright, 14)

#2: The “FEMA Economy”

In the wake of disaster, the government has a key role to play in re-establishing and enforcing the rules of the game that minimize signal noise and allow a robust response to the disaster by civil and commercial society. By ensuring private property rights and enforcing contracts, for example, the process by which property owners discover the new value of their homes and businesses can unfold swiftly. To this end, it is important for governments to provide reliable police protection and courts. But when the government gets in the business of providing the goods and services ordinarily provided through markets – such as trailers and extended unemployment compensation – well-intentioned policies can create significant signal noise and thereby slow recovery. In this lies a paradox: government policies designed to help may actually harm the intended beneficiaries.

The government’s provision of goods and services long after immediate needs have passed creates what one New Orleanian referred to as a “FEMA economy.”

  • “. . . .For example, many businesses trying to reopen have found it difficult to attract employees. In part, this is due to the fact that many people simply haven’t returned to the affected region. But the repeated extension of unemployment benefits has exacerbated this problem: despite the availability of jobs and the need for employees, the federal government continues to pay people not to work. Further, the premium wage that government relief agencies pay low-skilled workers crowds out private employers from the labor market, stunting the speed of recovery. Service-based companies find the labor shortages particularly daunting as they attempt to bring operations back on line. As one business owner noted, ‘You’re competing with FEMA; you’re competing with everybody. The contractors that are doing debris pick up and stuff, they are paying big bucks. They are paying $12 [to $15] an hour to stand behind a truck with a little [“stop”] sign.’”
  • According to a study released in February 2006, two-thirds of firms in the affected region had trouble recruiting workers, and media accounts affirm the recruitment woes of employers. And yet in March 2006, Congress extended unemployment benefits for another thirteen weeks beyond the twenty-six weeks of unemployment benefits authorized by the Stafford Act. (Chamleee-Wright, 15-17)

The $12-$15/hr. from FEMA contractors left fast food restaurants like Burger King and Popeye’s Chicken scrambling for workers. Wages jumped more than 50% from the federal minimum wage of $5.15 to more than $8/hr. with annual signing bonuses of $6000, and owners were still scrambling. Glen Helton, president and CEO of Strategic Restaurant Acquisition Corp. lamented his inability to reopen many of the fifty-four Burger Kind stores his company owns in New Orleans. Not only was much of his former workforce unable to return home, but many who did found other options. “To make matters worse, competition has exploded for the unskilled and low-skilled workers favored by the fast-food industry. Every employer operating in the wake of Hurricane Katrina is chasing after the same pool of workers, he said. ‘Now the job market includes anybody doing relief work at $15 an hour. … Everyone is looking for general laborers, and they are drawing from our normal work force’ . . .” (Darcé)

While many recognize the benefits of government assistance, it does seem that it is possible to have too much of a good thing:

  • To some extent, these consequences may be unavoidable. To the extent that swift debris removal and other key public services are deemed top priorities, wage premiums will certainly facilitate the process. But the longer FEMA workers stay, and the more relief work is treated as a public works project rather than the short-term provision of an essential service, the longer these distortions will persist. As one Mississippi resident observed, “There’s no reason for a business to open up that provides any kind of food service if right down the street you get food [for free] . . . . It was necessary for [government] help to be scaled down so our businesses could come back in, start giving us a tax base, start giving these people an incentive to get a job, to work to get back to normal.” (Chamleee-Wright, 15-17)

Conclusion

Government ineptitude during natural disasters may be good fodder for comedians and radio talk-show hosts, but the pertinent lesson is more about the need to adjust our expectations than the need for “better” government. Throughout the 20th century, we demanded that government take on more and more responsibility for citizens’ well-being with relatively little consideration of whether or not political institutions are inherently capable of meeting the lengthening list of expectations. The tendency to think that big problems – like natural catastrophes – can best be dealt with by big institutions, like government, is understandable. Persisting in that belief in the face of continuing evidence to the contrary is not. If we expect governments to perform functions for which they do not have the necessary knowledge, incentives, and mechanisms, we not only invite disappointment, but risk undermining their ability to perform the vital tasks for which they were created: restoring civil order, maintaining the rule of law, and providing those few public goods necessary for other economic and social institutions to operate.

Lessons 2 and 3 have given us a framework for a “division of labor” between our political and economic institutions in responding to natural catastrophes. However, sitting back and letting markets and governments do their jobs does not satisfy our personal desire to do “something” when disaster strikes. The next lesson turns from the big picture of institutional response to the human desire to help others. How can we, as individuals, best reach out to disaster victims in ways that not only satisfy our emotional needs but also the real needs of victims? Lesson 4, “When Disaster Strikes, What Can We Do?” examines the institutional dynamics of charitable giving.

Appendix 1: “Other People’s Money”

In 1979, Nobel laureate Milton Friedman and his noted-economist wife, Rose, published their best-seller, Free to Choose, containing what has become recognized as a classic analysis of the incentive problems associated with government spending. Below is an excerpt of their explanation of the perverse incentives that face people spending other people’s money – the “OPM Syndrome.” As you read this excerpt, mentally substitute “disaster relief programs” where they refer to “welfare.” Their insight is as useful in our contemporary consideration of the role of government in disasters, as it was when written in the context of welfare reform three decades ago.

“When you spend, you may spend your own money or someone else’s; and you may spend for the benefit of yourself or someone else. Combining these two pairs of alternatives gives four possibilities summarized in the following simple table:YOU ARE THE SPENDER
On Whom Spent
Whose MoneyYouSomeone Else
YoursIII
Someone Else’sIIIIV

Category I in the table refers to your spending your own money on yourself. You shop in a supermarket, for example. You clearly have a strong incentive both to economize and to get as much value as you can for each dollar you do spend.

Category II refers to your spending your own money on someone else. You shop for Christmas or birthday presents. You have the same incentive to economize as in Category I but not the same incentive to get full value for your money, at least as judged by the tastes of the recipient. You will, of course, want to get something the recipient will like – provided that it also makes the right impression and does not take too much time and effort. (If, indeed, your main objective were to enable the recipient to get as much value as possible per dollar, you would give him cash, converting your Category II spending to Category I spending by him.)

Category III refers to your spending someone else’s money on yourself – lunching on an expense account, for instance. You have no strong incentive to keep down the cost of the lunch, but you do have a strong incentive to get your money’s worth.

Category IV refers to your spending someone else’s money on still another person. You are paying for someone else’s lunch out of an expense account. You have little incentive either to economize or to try to get your guest the lunch that he will value most highly. However, if you are having lunch with him, so that the lunch is a mixture of Category III and Category IV, you do have a strong incentive to satisfy your own tastes at the sacrifice of his, if necessary.

[Many government] . . . programs fall into either Category III – for example, Social Security, which involves cash payments that the recipient is free to spend as he may wish; or Category IV – for example, public housing; except that even Category IV programs share one feature of Category III, namely, that the bureaucrats administering the program partake of the lunch; and all Category III programs have bureaucrats among their recipients.

. . . Legislators vote to spend someone else’s money. The voters who elect the legislators are in one sense voting to spend their own money on themselves, but not in the direct sense of Category I spending. The connection between the taxes any individual pays and the spending he votes for is exceedingly loose. In practice, voters, like legislators, are inclined to regard someone else as paying for the programs the legislator votes for directly and the voter votes for indirectly. Bureaucrats who administer the programs are also spending someone else’s money. Little wonder that the amount spent explodes.

The bureaucrats spend someone else’s money on someone else. Only human kindness, not the much stronger and more dependable spur of self-interest, assures that they will spend the money in the way most beneficial to the recipients. Hence the wastefulness and ineffectiveness of the spending.

But that is not all. The lure of getting someone else’s money is strong. Many, including the bureaucrats administering the programs, will try to get it for themselves rather than have it go to someone else. The temptation to engage in corruption, to cheat, is strong and will not always be resisted or frustrated. People who resist the temptation to cheat will use legitimate means to direct the money to themselves. They will lobby for legislation favorable to themselves, for rules from which they can benefit. The bureaucrats administering the programs will press for better pay and perquisites for themselves – an outcome that larger programs will facilitate.

The attempt by people to divert government expenditures to themselves has two consequences that may not be obvious. First, it explains why so many programs tend to benefit middle- and upper-income groups rather than the poor for who they are supposedly intended. The poor tend to lack not only the skills valued in the market, but also the skills required to be successful in the political scramble for funds. Indeed, their disadvantage in the political market is likely to be greater than in the economic. Once well-meaning reformers who may have helped to get the welfare measure enacted have gone on to their next reform, the poor are left to fend for themselves and they will almost always be overpowered by the groups that have already demonstrated a greater capacity to take advantage of available opportunities.

The second consequence is that the net gain to the recipients of the transfer will be less than the total amount transferred. If $100 of somebody else’s money is up for grabs, it pays to spend up to $100 of your own money to get it. The costs incurred to lobby legislators and regulatory authorities, for contributions to political campaigns, and for myriad other items are a pure waste – harming the taxpayer who pays and benefiting no one. They must be subtracted from the gross transfer to get the net gain – and may, of course, at times exceed the gross transfer, leaving a new loss, not gain.

These consequences of subsidy seeking also help to explain the pressure for more and more spending, more and more programs. The initial measures fail to achieve the objectives of the well-meaning reformers who sponsored them. They conclude that no enough has been done and seek additional programs. They gain as allies both people who envision careers as bureaucrats administering the programs and people who believe that they can tap the money to be spent.

Category IV spending tends also to corrupt the people involved. All such programs put some people in a position to decide what is good for other people. The effect is to instill in the one group a feeling of almost God-like power; in the other, a feeling of childlike dependence. The capacity of the beneficiaries for independence, for making their own decision, atrophies through disuse. In addition to the waste of money, in addition to the failure to achieve the intended objectives, the end result is to rot the moral fabric that holds a decent society together.

Milton and Rose Friedman. Free to Choose. New York: Avon Books, 1979. pp. 116-119.

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