As the second anniversary of Hurricane Katrina approaches, received wisdom dictates that the Gulf Coast has barely begun to recover. This is not a fair assessment of the facts. Recovery is occurring on a neighborhood level; views of recovery based on political jurisdictions do not reflect accurately the quality or sustainability of the recovery. The ability to leverage social capital and make use of the leadership emanating from the voluntary sector is critical to promoting recovery.

Government-led recovery programs are in many ways causing more harm than help. By failing to clearly articulate the rules that govern the rebuilding process and the resources that governments will provide, governments at all levels have made it difficult for residents and business owners to make informed and intelligent decisions about whether and how to rebuild.

The uncertainty created by the lack of credible commitments from the public sector causes significant delays in rebuilding. Government needs to set up clear rules of property and contract, and then get out of the way. Continued government meddling just confuses economic actors and retards economic recovery rather than aiding.

By contrast, community organizations, businesses, nonprofit groups and religious institutions help families make informed decisions about rebuilding, thereby solving collective action problems. Reopened businesses, resumption of church services and similar phenomena send positive signals that communities are coming back. Residents making decisions about returning rely heavily on these signals in the face of conflicting or incorrect signals from authorities.

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Policy-makers must avoid political posturing and make and execute clear, credible commitments after disasters. Making promises that have little chance of coming to fruition slows rebuilding efforts and complicates life on the ground, as do complex and ineffective bureaucracies like Louisiana’s Road Home Program. Policy-makers would do better to promise relatively little — but then deliver on those promises.

You can read the preliminary results from the Mercatus Center’s five-year study of Gulf Coast reconstruction at: mercatus.org/katrina.