PERSPECTIVE: ‘Show-Me State’ offers lesson on disaster recovery

Joplin, Missouri’s rebound from the devastating EF5 tornado last May has been remarkable. After just a few months, many businesses, homes and schools had been rebuilt and order was beginning to return to daily life.

This remarkable recovery begs the question “why has Joplin’s recovery been so much faster and more effective than other areas destroyed by natural disasters such as New Orleans, Louisiana or Tuscaloosa, Alabama?”

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Economic Freedom in Joplin, Missouri

Joplin was struck by an EF5 tornado last May. Afterwards, community members freely and voluntarily worked together to help rebuild the town. Daniel J. Smith, economics professor at Troy University, studied the rebuilding.

After spending two weeks in Joplin, conducting interviews with residents, business owners, and community leaders to understand the city’s approach to recovery, it was clear that private businesses, charities and associations played an uncommon, leading role in the effort.

In contrast to other recoveries in which federal and state governments orchestrate recovery, policymakers allowed the free market, voluntary sector to guide recovery in Joplin, demonstrating how effectively economic freedom can help communities rebuild after a natural disaster.

City and state governments allowed the voluntary sector to drive the recovery process in Joplin. Subsequently, businesses, charities and individuals stepped forward to meet the task at hand.

Major employers like St. John’s Hospital and Wal-Mart quickly announced their intentions to rebuild and kept employees on payroll. Businesses found innovative ways to reopen — Home Depot built a temporary tent store in its parking lot.

Government aided the recovery by supporting economic freedom, not attempting to plan or direct the recovery. Construction workers were met with reasonable licensing regulations that allowed them to get to work right away, extra plan approvers and building inspectors helped avoid delays in granting building permits, and Gov. Jay Nixon issued Executive Orders relaxing bidding and contracting procedures. Subsequently, removal of 3 trillion cubic yards of debris was completed by early August, allowing rebuilding to commence safely in the most devastated neighborhoods. Strikingly, Joplin Public Schools reopened on time for the new school year.

A key feature of this remarkable recovery is the way prices accurately reflected the value of certain goods and services necessary for the rebuilding process. Construction workers trekked to Joplin in response to higher wages, and building supplies were quickly redirected to Joplin because prices signaled that these materials were urgently needed there.

The government’s hands-off approach to rebuilding in Joplin also allowed the non-profit voluntary sector to share in the recovery. More than 90,000 individuals volunteered more than 500,000 man hours in Joplin. Many assisted in debris clean-up, and others provided specialized services like tree removal, home demolition, and home construction, including seven homes built by ABC-TV’s Extreme Makeover: Home Edition. The private sector accommodated about 90 percent of displaced households, dwarfing the number living in FEMA temporary housing.

By allowing the free market to assist in the rebuilding process, Joplin officials have shown that upholding economic freedom is the most effective and efficient approach for communities to rebound after a natural disaster. The role that the voluntary sector played in Joplin’s recovery only highlights its importance in improving society on a day-to-day basis.

Daniel J. Smith is an assistant professor of economics and Daniel Sutter is a professor of economics at the Manuel H. Johnson Center for Political Economy at Troy University.

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