Economics ETDs

Publication Date

Fall 8-1-2019

Abstract

The dissertation is organized in six chapters. The first chapter provides a synopsis of the four research articles that are comprised in this manuscript. It outlines the goals of each article and connects them to specific Ostromian insights to shed light on the empirical findings. Chapters 2, 3, and 5 are based on a field study that I conducted in Sindhupalchowk, Nepal following the devastating earthquake in 2015. Chapter 4 uses case studies from Chicago, New Orleans, Nepal, and Indonesia. The final chapter summarizes major lessons from the four papers.

The second chapter investigates household-level coping responses to the 7.8 magnitude earthquake in Nepal and their role in post-disaster recovery. I measure post-disaster recovery using composite resilience-indices that capture both economic and psychosocial aspects of post-disaster recovery. Because household responses are potentially endogenous, I use a full-information multi-equation regression framework that allows for contemporaneous correlation across equations to account for the processes that determine households’ choices. I find strong evidence to suggest that increasing financial access and labor adjustment choices has positive and significant impact on post-disaster economic resilience. On the other hand, while the adoption of financial coping strategies enhances psychosocial resilience, I find that labor adjustment choices can disturb family and social dynamics, thereby negatively impacting psychosocial resilience. My secondary findings indicate that government assistance can have unintended detrimental impacts on economic resilience, hinting at the subpar quality of political institutions in Nepal. These results underscore the importance of mobilizing and expanding market and non-market alternatives in post-disaster recovery and reconstruction efforts.

The third chapter delves into post-disaster collective action. First-generation theories of collective action suggest that self-utility maximizing individuals in a setting characterized by high degrees of non-excludability and non-rivalry prefer the dominant strategy to evade cooperative choices and instead opt to free-ride. However, an overwhelming number of successful and unsuccessful collective action efforts documented worldwide in the aftermath of natural disasters contradicts this notion. This paper argues that second-generation theories of collective action forwarded by Elinor Ostrom and others bridge this theoretical-empirical divide. I posit that a social norm-based model of human behavior, not confined within a purely atomistic, material payoff maximizing mindset, provides a more consistent analytical framework to explain post-disaster collective activities. Using primary data from Sindhupalchowk, Nepal, I empirically demonstrate that bonding social capital fosters mutual trust, which in turn creates a milieu conducive to collective action efforts. Besides this mediated effect, I find that both bonding and bridging/linking social capital also have direct effects on post-disaster collective action. This paper presents social capital as the key determinant of self-governance and resilience in post-disaster situations that require concerted efforts from citizens, the private sector, and public institutions towards overcoming the common challenges of rehabilitation and reconstruction.

The fourth chapter makes a case for the dynamic nature of post-disaster goods and services. A post-disaster situation can be characterized as one filled with turmoil of all scales. The standard approach to post-disaster policymaking and academic thinking, particularly concerning post-disaster foreign aid in developing countries, tends to lump all aspects of relief, reconstruction, rehabilitation, and recovery as a single mega-project, — one that can be efficiently operationalized only under a Gargantua central planning body that is able to control all aspects of post-disaster recovery. This paper refutes such convenient assumptions as myopic and inconsistent with reality. Using insights from Ostroms’ analyses of the nature of goods and public choice, I unpack the elements of post-disaster package and analyze how institutional changes following a disaster can lead to changes in the nature of each element. To that end, I present four cases from Chicago, New Orleans, Nepal, and Indonesia to discuss the dynamic nature of post-disaster goods and services and the shuffling of goods-classification based on their shifting natures. The goal of this exercise is to highlight the diversity, heterogeneity, and fluidity of goods and services that are needed in any post-disaster scenario. This approach to reconceptualizing post-disaster aid is particularly relevant in developing countries that have poor-quality public institutions and are often mired in political corruption and bureaucratic inefficiencies.

The fifth chapter examines the role of social entrepreneurs in post-disaster contexts. I argue that social entrepreneurship has a distinct role to play within the non-profit or third-sector. That is, its role is in no way residual, accidental, or tertiary – that of a temporary filler until the private sector and public institutions step in. This is especially true in the context of a post-disaster scenario where both the private and public enterprises have confined roles to play in the provision of private or public goods. It is the sector that lies within this ‘third’ domain that can contribute towards civic engagement, maintain the social fabric, and promote solidarity. Moreover, in post-disaster scenarios where infrastructures and institutions facilitating operations of markets and functioning of public institutions are hindered, social entrepreneurs often engage in the provision of goods and services whose production and provision are typically done by the private and/or public sectors. Their role, however, transcends the mere provision of goods, – private or public – and includes the promotion of active citizenship through co-production processes. Using a quasi-experimental set up from the case of Dhurmus Suntali Foundation’s Namuna village project in Nepal following the 2015 earthquake, I empirically demonstrate this critical role of the third sector in post-disaster contexts. My findings show that social entrepreneurs’ involvement increases citizens’ participation in volunteering activities, community engagement, and post-disaster reconstruction efforts.

Degree Name

Economics

Level of Degree

Doctoral

Department Name

Department of Economics

First Committee Member (Chair)

Alok K. Bohara

Second Committee Member

Richard Santos

Third Committee Member

Andrew Goodkind

Fourth Committee Member

Virgil H. Storr

Language

English

Keywords

Ostrom, Nepal, earthquake, disasters, institutions, public choice

Document Type

Dissertation

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