Preparing for disaster

This is a topical introduction to my paper on Disaster Prevention Bonds.

It’s easy to criticize governments for not being prepared for the coronavirus pandemic. But consider what preparing for a pandemic actually means. Thousands of hospital beds lying empty for most of the year, nurses and doctors on standby waiting for a crisis that might never happen. Testing kits, protective clothing, vaccine manufacturing capabilities unused in a sterile storage facility, and deteriorating with time…. And what’s so special about a pandemic? Why should we not prepare against other disasters that might arise with equal or greater probability?

An electromagnetic pulse, an asteroid hitting earth, a volcanic supereruption? The truth is that the best our governments do is react to something that actually happens. Our problem is not that governments are slow, reactive, blundering, doing too little—or too much—too late. It is that governments or supranational bodies like the World Health Organization are not necessarily the best bodies to trust with disaster preparedness. (Indeed, once this crisis is over, the WHO’s role in refusing to consider lessons from Taiwan needs to be looked at very carefully. It’s clear already, though, that in common with most other organisations of any kind, the WHO is at least as interested in self-perpetuation as in the health of the world’s population. ) So what is the problem with government, especially government at levels high enough to deal effectively with national or global disasters?

•  It has few incentives to watch out for disasters and react quickly and preemptively.
•  It’s is slow to react to crises, it prefers top-down, one-size-fits-all solutions, and is very slow to adapt its policies to changing circumstances.
• It has short time horizons, and though its individual members will be hard-working and well intentioned, it has no no incentive to correct its deficiencies.
• It is often concerned to prioritise actions that deal with visible problems at the expense of those that are too slow moving or unglamorous for television. Better solutions would not focus on appearances at the expense of societal well-being.
•  Related to the previous point—and of particular relevance to the current pandemic—a government will over-react to problems that have an immediate, visible impact. Such an over-reaction might be more detrimental to societal well-being than the crisis. 

In relation to this last point, a government over-reaction—the cure being worse than the disease—might have a baleful impact in the longer term too if, when faced with another serious threat, government, remembering previous over-reaction and the consequent public backlash, under-reacts. Disaster Prevention Bonds, in my view, would deal with all these weaknesses of humanity's current approach to disaster preparation.