The Political Economy of Hurricane Katrina and Community Rebound

The Political Economy of Hurricane Katrina and Community Rebound

New Thinking in Political Economy series

Edited by Emily Chamlee-Wright and Virgil Henry Storr

In 2005 Hurricane Katrina posed an unprecedented set of challenges to formal and informal systems of disaster response and recovery. Informed by the Virginia School of Political Economy, the contributors to this study critically examine the public policy environment that led to both successes and failures in the post-Katrina disaster response and long-term recovery. Building from this perspective, this book lends critical insight into the nature of the social coordination problems disasters present, the potential for public policy to play a positive role, and the inherent limitations policymakers face in overcoming the myriad challenges that are a product of catastrophic disaster.

Chapter 7: Entrepreneurship and Social Networks in Post-Disaster Environments

Petrik Runst

Subjects: economics and finance, austrian economics, public choice theory, public sector economics, environment, disasters, politics and public policy, public choice


Petrik Runst INTRODUCTION 7.1 Hurricane Katrina disrupted and even destroyed social networks. Many New Orleanians were displaced after the storm; tens of thousands spent months and even years in nearby cities like Baton Rouge, Houston and Atlanta before they could return to New Orleans to rebuild their homes. During their time away they were often separated from their families, neighbors, friends and former co-workers as well as members of their church community and social clubs. As such, the networks that they relied on as they went about their everyday lives pre-Katrina were not as readily available to them during the difficult post-Katrina period. This chapter is an attempt to tease out how social networks are reconstituted after a major disaster like Katrina. Burt (1992, 1998, 2000) has described how social networks are constituted in non-disaster contexts. According to Burt (1992, 1998), structural holes represent non-existent connections, or ‘holes’, between clusters of well-connected individuals. If an individual can build a weak tie, as first introduced by Granovetter (1973), in order to bridge one or more holes he controls information flows between the groups and enjoys the accompanying control benefits. The individual who recognizes these ties and actively seeks to utilize them is called tertius gaudens, or the ‘third who benefits’ (Burt 1992). Similar to a market situation, as more and more people attempt to bridge the same structural hole, there are diminishing marginal returns for the individual tertius and profits are finally driven to zero when all holes are closed. However,...

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