Do Disasters Lead to Learning? Financial Policy Change in Local Government

Abstract

Natural disasters may be windows of opportunity for policy change and learning by local governments, which are the entities primarily responsible for the recovery and rebuilding process after a disaster strikes in the United States. During disaster recovery, local governments are faced with myriad policy challenges, from technical issues concerning the repair and replacement of infrastructure to broader substantive questions of reducing vulnerability to future hazards. Their actions are constrained by federal and state policies related to disaster recovery, and yet they must make their own decisions regarding disaster recovery finance within those constraints. These decisions may then influence a local government's long‐term fiscal planning, such as their target level of budget reserves, borrowing, categories of spending, and mechanisms to generate revenue. To assess how local governments respond to and learn from fiscal constraints during disaster recovery, we analyze flood recovery in seven Colorado communities in the three counties most impacted by extreme flooding in 2013. Data from in‐depth interviews with local finance personnel and other administrators, budgets, and public documents are used to analyze recovery decisions and postdisaster fiscal policy learning. While most local governments drew instrumental lessons from the disaster experience, such as how to better manage grant reimbursement processes, some also drew broader lessons that may contribute to achieving longer term community resilience, fiscal stability, and disaster preparedness.

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