This perspective examines key issues confronting the private sector in disaster recovery financing, the roles that private-sector entities have played, and where there has been successful integration or leadership of these organizations. It briefly explores challenges that the private sector faces. Given continued data gaps in this field, the authors offer opportunities for research and policy analysis.

What Role Does the Private Sector Have in Supporting Disaster Recovery, and What Challenges Does It Face in Doing So?

Anita Chandra, Shaela Moen, Clarissa Sellers

Expert InsightsPublished May 18, 2016

The changing scope and scale of disasters, both natural and technological, have altered the ways in which disaster management and financing are addressed and the roles of private-sector organizations specifically. Businesses and nonprofit organizations are increasingly central to the process, offering critical support in immediate disaster response but also contributing necessary redevelopment funding that supports community recovery. Although these new expectations position the private sector as a key leader in community resilience, these responsibilities have not been fully met with established guidance or clear metrics for how and when these organizations should participate in disaster recovery and financing.

This perspective examines key issues confronting the private sector in disaster recovery financing, what roles private-sector entities have played, and where there has been successful integration or leadership of these organizations. The perspective also briefly explores challenges that the private sector faces, with particular attention to issues of information use and application, coordination in response and recovery, and timing of funding. Given continued data gaps in this field, the authors offer opportunities for research and policy analysis.

Key Takeaways

The Private Sector Contributes to Disaster Recovery Financing in a Variety of Ways

  • The private sector contributes to disaster recovery financing in a variety of ways, including playing a key role in early response and long-term recovery, collaborating with the public sector in public–private partnerships, driving innovation and facilitating technology use, helping smaller communities manage influxes of funds, and supplementing federal disbursement processes.

Public–Private Partnerships Are Integral

  • They can help to increase efficiency and effectiveness in disaster management. The partnerships between private actors and public-sector partners and recipients can alter the strategic focus of disaster management agencies.
  • Public–private partnerships can reduce the burdens placed on government to provide certain goods and services immediately and over time, permitting the public sector to focus on other important strategic priorities.
  • For-profit businesses can provide important templates informing the design of public-sector programs.

The Private Sector, Particularly Businesses, Is Key to Disaster Recovery

  • The private sector is key to developing and implementing flexible financing models. It is also critical in ongoing resilience development.

The Private Sector Faces Challenges When It Comes to Financing

  • These challenges arise from information availability, tracking the flow and timing of funds, and basic challenges in what financial supports can be provided, particularly by business. Further, explaining the value of business investment in recovery can be difficult.

Recommendations

  • Determine the full extent of private-sector contributions in disaster recovery.
  • Extend private- and public-sector disaster recovery analyses to include comparative value of private-sector engagement and assessment of coordination.
  • Assess initiatives in which private-sector organizations, particularly businesses, assist in supporting resilience.

Topics

Document Details

Citation

Chicago Manual of Style

Chandra, Anita, Shaela Moen, and Clarissa Sellers, What Role Does the Private Sector Have in Supporting Disaster Recovery, and What Challenges Does It Face in Doing So? Santa Monica, CA: RAND Corporation, 2016. https://www.rand.org/pubs/perspectives/PE187.html.
BibTeX RIS

This research was conducted by the Center for Catastrophic Risk Management and Compensation within RAND Justice, Infrastructure, and Environment.

This publication is part of the RAND expert insights series. The expert insights series presents perspectives on timely policy issues.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.