Supporting Puerto Rico's Disaster Recovery Planning
Sep 30, 2020
The authors review Puerto Rico's economic history and compare observed economic indicators following the storms to counterfactual estimates to assess the real net impacts of the 2017 hurricanes. This analysis provides the context for the recovery plan for rebuilding a sustainable and healthy economic sector and whole of Puerto Rico.
A Review of Evidence and Options Following Hurricanes Irma and Maria in 2017
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Recovery of the Puerto Rico economy in the aftermath of Hurricanes Irma and Maria means not only rebuilding the public and private infrastructure, supply chains, human capital, and other contributors to economic output but also reversing negative economic trends that existed and presented major challenges to growth even before the storms hit.
In their report, the authors explain the history of economic development and policy in Puerto Rico and discuss the state of the prestorm economy, including key economic challenges. They use the historical data on overall economic activity (unrelated to the hurricanes) to construct a counterfactual to assess the net causal effect of Hurricanes Irma and Maria on Puerto Rico's economy. The counterfactual examines what would have happened to employment, labor, population, and tourism, as well as the government of Puerto Rico's fiscal position, had the hurricanes not occurred. Observed economic indicators following the storms are then compared to this counterfactual to estimate the real net economic consequences of the hurricanes, including overall damage from the storms and the effect of the recovery effort.
The analysis provides considerable detail on the conditions in Puerto Rico before and after the 2017 hurricane season so that decisionmakers can adopt better policies in rebuilding a sustainable and healthy economic sector and, more broadly, the whole of Puerto Rico. The authors recommend a set of principles based on economic theory and provide courses of action included in the recovery plan compiled from their findings about prestorm conditions and trends and the input/observations of on-the-ground partners and stakeholders in the recovery effort.
Brief History of Economic Development in Puerto Rico
Detailed Economic Prestorm Conditions and Trends in Puerto Rico
Challenges to Economic Development in Puerto Rico
Methodology for Economic Damage Assessment Following Hurricanes Irma and Maria
Economic Damage Assessment Following Hurricanes Irma and Maria
A Set of Principles for Public Investment Consistent with Economic Growth in Puerto Rico
Potential Courses of Action for Economic Development in Puerto Rico Following Hurricanes Irma and Maria
Detailed Courses of Action
Notes on Electricity Deregulation and Privatization
Supplemental Information on the Jones Act
Case Studies of Economic Growth
Government Promotion of Entrepreneurship
Recovery Spending and Impacts
This research was sponsored by the Federal Emergency Management Agency and conducted within the Strategy, Policy and Operations Program of the Homeland Security Operational Analysis Center.
This report is part of the RAND Corporation Research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.
The RAND Corporation 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.