Post-Disaster Recovery and Social Entrepreneurship
The generally accepted formula for post-disaster socioeconomic recovery requires equal parts large public investment, a well-conceived plan for restoring damaged infrastructure and property, and appropriate public–private partnerships. Thus, if recovery is slow or irregular, it is tempting to assign responsibility to insufficient allocation of funds, ineptly designed or implemented development plans, and/or a lack of engagement by both the public and private sectors. For example, in the years following Hurricane Katrina, both critics and policy makers have asserted that additional public investment and a renewed commitment on the part of public officials will compensate for spotty recovery in post-Katrina New Orleans. This formulaic view of recovery may stem from a misunderstanding of how communities rebound from disaster and underestimates the role that social entrepreneurship plays in community recovery.
Social entrepreneurs—who operate in a non-market setting such as a civic or charitable organization—play critical roles in every disaster-recovery effort. They provide the materials, services, and information that people need to rebuild their lives. They often fill in the gaps of insufficient, government-provided services. Improvements in disaster-recovery policy can only stem from a more nuanced understanding of how communities recover from disasters, an understanding that appreciates how social entrepreneurs promote community resilience and avoids creating barriers to social entrepreneurship.
This article offers recommendations to policy makers who are considering recovery-related issues. The application of these recommendations reaches far beyond New Orleans. As communities around the globe prepare for or recover from natural and man-made disasters, it is imperative that policy makers at all levels understand the driving entrepreneurial force that strengthens a community’s preparation for and response to such circumstances, and that they consider how to responsibly foster social entrepreneurship in post-disaster contexts.
Social Entrepreneurship and Post-Disaster Recovery
Social entrepreneurs try to cure what ails society, and they judge their activities by their success in bringing about desired transformations. Because of their close ties to the community, they are often alert to neighborhoods’ needs in a way that government agencies are not. Social entrepreneurs don’t just fill the gaps in needed services—they also work to galvanize the support that is essential for community resilience.
Entrepreneurship in Non-Market Environments
Though use of the term social entrepreneurship, which describes ventures aimed at social change rather than monetary profits, has become increasingly frequent in recent years, the activity it describes predates the term by centuries. Abolitionists who campaigned for an end to slavery and helped escaped slaves run to freedom were certainly social entrepreneurs. And well-known twentieth-century figures like Mahatma Gandhi, Martin Luther King, and Muhammad Yunus, who work(ed) to improve their communities not through commerce or government action but through advocacy and community organizing, are also social entrepreneurs. Indeed, social entrepreneurs may be community, business, church, and civic leaders; they may be activists or educators. They often work through nonprofit organizations, but they need not be involved in any formal group. The common thread among them is that they possess short- or long-term social change agendas.
Alvord et al. describe social entrepreneurship as “a catalyst for social transformation,” and Mort et al. similarly observe that social entrepreneurs establish new social enterprises and promote innovation in existing ones. The goal of social entrepreneurship, they assert, is to solve social problems by developing “innovative solutions” and mobilizing “the ideas, capacities, resources, and social arrangements required for sustainable social transformation.” While social entrepreneurs may engage in business or political action, profits or political power are not their chief aims.
Social entrepreneurship initiatives may draw on services and support outside the community, but successful endeavors often empower members of local communities to solve common problems by pooling resources, talents, and efforts. Social entrepreneurs around the globe, for example, have employed a number of strategies aimed at curtailing domestic violence, a social problem that is often inadequately addressed by government officials and law-enforcement officers in rich and poor communities alike. To fill the gap, social entrepreneurs have been trying everything from mobilizing large groups of women to directly confront the abusers to organizing women to provide safe houses and underground-railroad-style escape routes for battered women.
A feedback mechanism akin to profit and loss guides social entrepreneurs in their local endeavors. Social entrepreneurs must rely on community support to drive their agendas. If they are not pursuing socially desirable ends or are not achieving stated goals, community members are quick to withdraw support: They will stop volunteering, stop attending meetings, and stop contributing resources. Ineffective social entrepreneurs lose the support of stakeholders and constituents in the same way that for-profit entrepreneurs lose the support of stockholders and customers. Government-sponsored programs, however, may be less responsive to community needs since their funding and staffing do not rely on local buy-in and they can continue to function long after community support has eroded.
Social Entrepreneurs in Post-Disaster Contexts
Social entrepreneurs must be given the freedom to maneuver after a disaster if communities are to truly recover. Social entrepreneurs perform important social functions before, during, and after a disaster not only by serving as important information sources for the community about impending danger and necessary preparation, but also by organizing evacuations and ensuring that community members reach shelter. In the immediate aftermath of a disaster, social entrepreneurs organize community members to search for missing family and neighbors, advocate for government assistance and the restoration of public services, and pool resources to feed, shelter, and otherwise care for community members who have suffered during the disaster.
When a community experiences a disaster, its members not only sustain damage to property, but also—if forced to evacuate—lose access to social capital (i.e., social networks). In the days, months, and years following a disaster, social entrepreneurship is critical to solving the collective-action problem which evacuees face regarding if and when to return. If evacuees return it is possible that they can rejoin the social networks disrupted by the disaster. If, however, members of their networks elect not to return, evacuees’ incentives to return are diminished. Other network members face the same dilemma. Returning is only beneficial if most people return; if they do not, it may be more beneficial to establish a new life elsewhere. By collecting information about evacuees, developing strategies that simplify their return, and providing necessary services to individuals upon return, social entrepreneurs encourage dispersed residents to come back and promote community resilience.
Social entrepreneurs also assist community members in their rebuilding efforts. They organize teams to gut damaged houses and demolish the unrecoverable ones, provide advice and information to help individuals overcome the bureaucratic and insurance hurdles that can slow rebuilding, serve as advocates on behalf of residents, expressing common frustrations and community needs to government officials, and provide legal, education, and health services to community members.
Consider the efforts of nurse Alice Craft-Kerney to provide free health care to residents of the Lower Ninth Ward, filling a critical gap in service and smoothing the path for residents wishing to return to the community. In the fall of 2006, she and a team of volunteers observed that for the community to rebound, residents would require access to basic health care services. Her team resolved to meet that need by establishing a health care clinic. Building a clinic in the Lower Ninth Ward, however, meant starting from scratch. By Ms. Craft-Kerney’s own admission, she had no idea how to move forward. She took a leap of faith—away from a secure nursing job, toward establishing a clinic—with no assurance that she would be able to provide for herself, much less that she would be able to build a clinic.
Ms. Craft-Kerney’s passion and vision inspired those around her. Her friend and fellow nurse, Patricia Berryhill, donated her former home in the Ninth Ward to house the clinic. Volunteers, contractors, and tradesman donated their labor. Florida State University student Joe O’Shea took a semester off from his studies to raise money for the clinic. Organizations like Leaders Creating Change through Contribution raised $30,000 to renovate the facility. Members of the medical community donated equipment and advice. The clinic began serving patients in early 2007.
An Example from the New Orleans East Vietnamese Community
Examining the role that social entrepreneurship played in the near-total recovery of the badly damaged New Orleans East Vietnamese community illustrates social entrepreneurship’s capacity to strengthen a community’s resilience. Two years after Katrina, 90 percent of the residents displaced by the disaster had returned to the community—twice the return rate of other communities in New Orleans. Father Vien, the pastor of Mary Queen of Vietnam Catholic Church (MQVN), spurred the return of his parishioners and the recovery of the community.
Prior to Hurricane Katrina, MQVN was the center of spiritual, social, and commercial life for its 3,800 parishioners; most lived within a mile of the church. In addition to being a place of worship, the church space and the activities held there provided a place and occasion to socialize. Of the 75 businesses that surrounded the church, all but a few were owned by parishioners.
When Hurricane Katrina hit, Father Vien did not evacuate. Instead, he weathered the storm in the church’s school building, opening it to 500 of his parishioners. After the storm passed, but before the flooding began, many parishioners returned to their homes. Only hours later, however, floodwaters began to rise. Using boats and cell phones, Father Vien and several volunteers collected parishioners and returned them to the second floor of the school building.
In the days and weeks after the storm passed, Father Vien played a significant role in encouraging parishioners to return. He visited evacuation sites in Louisiana, Texas, Georgia, and Arkansas to check on his parishioners and to convey information about family members who had evacuated to distant cities. He resumed holding services soon after the storm, issued calls to return to his far-flung congregants, and engaged the media to alert the public to his community’s swift return. These efforts sent a powerful signal to those who had not yet come back that the community would indeed rebound, mitigating the collective-action problem evacuees faced regarding if and when to return. The well-attended worship services also signaled to government officials that the members of this community intended to come back and rebuild. This prevented the city from going ahead with its plans to bulldoze the entire community in order to build a park. Father Vien networked with relief organizations, and MQVN became both a site where parishioners could secure immediate necessities (e.g., clothes, blankets, water, food, and cleaning products) and an informal bridge between parishioners and government-relief agencies.
Father Vien’s dedicated efforts to bring about the renewal of his community have been quite effective. Within two years of Katrina, the majority of his parishioners had returned, most of the businesses that they owned had reopened, and the neighborhood was well on its way to being rebuilt.
Challenges Social Entrepreneurs Must Overcome in Post-Disaster Contexts
Unfortunately, social-entrepreneurial responses to disaster can be, and have been, frustrated in many post-disaster contexts. While regulations always impose a cost on would-be actors, a number of the regulations governing entrepreneurial activity in non-disaster circumstances actually impede post-disaster recovery. Though justifiable in some instances, they slow entrepreneurial endeavors and erect licensing, inspection and financial hurdles that social entrepreneurs must overcome. In a post-disaster context, however, slowing social entrepreneurs and making them jump unnecessary hurdles before they can operate hampers a community’s socioeconomic recovery.
For example, zoning restrictions and building codes delayed Ms. Craft-Kerney’s efforts to open her much-needed health clinic by almost six months. New Orleans’ building inspectors did not permit the Lower Ninth Ward Health Clinic to open, even though the facilities were completed, because it was “a commercial entity” on a block that was zoned as residential. Inspectors also cited the clinic for other violations, such as a handicap ramp built with a hand railing on only one side.
Maintaining non-disaster occupational licensing requirements also poses a problem in post-disaster contexts. Under ordinary circumstances, these regulations may be advisable, but in a post-disaster setting they impede entrepreneurial responses and, consequently, community recovery. New Orleans requires individuals practicing trades critical to community recovery, such as carpenters and electricians, to obtain a license to operate legally. In January 2006, the city temporarily suspended city inspections and permitted licensed electricians or electrical contractors to inspect electrical work themselves. However, it did not relax licensing requirements. Other jurisdictions, such as the state of Florida, have relaxed occupational licensing requirements following disasters, and communities have reaped the benefits of this flexibility.
Regime uncertainty, or signal noise, is perhaps the regulatory activity most harmful to social entrepreneurship. Signal noise occurs when officials announce conflicting policies or make conflicting statements about the prospects for, or desirability of, the recovery of a particular community. Effective entrepreneurs need a predictable regulatory environment because social entrepreneurship requires one to be alert to and interpret signals in the community—such as the need for health care—and to respond accordingly. Unclear and contradictory statements about government post-disaster policies may either paralyze social entrepreneurs or redirect their energies in socially wasteful directions by distorting the signals upon which they rely to guide their decision-making processes.
For example, residents of some New Orleans communities were not allowed to return to their residences until months after the storm. Complicating the return process were conversations during the city’s redevelopment planning in which some officials discussed openly the prospect of buying out residents, while others recommended declaring a moratorium on rebuilding. Such signal noise precluded residents and entrepreneurs alike from determining whether particular neighborhoods would be permitted to rebound, even if residents were committed to rebuilding.
It is this kind of uncertainty and overt pressure from the city that led Father Vien to engage directly in the political process. Rather than assisting his congregants with the concrete and difficult task of rebuilding their homes and businesses, he had to redirect some of his energies to guarantee that his members would have a right to rebuild if they so desired and to asses the availability of the services that they needed in order to return.
Implications for Policy
Though social entrepreneurs have the requisite knowledge and capability to respond to disasters and their aftermath, current policy and government-led efforts can substantially undermine their efforts. However, government can improve this situation in two major ways: by easing up on regulations in the wake of a disaster and by allowing social entrepreneurs the freedom to act immediately.
Create an alternative regulatory regime appropriate to a post-disaster context.
Social entrepreneurs respond creatively to the unique needs that arise in post-disaster contexts and, in so doing, promote community recovery. Given a community’s need for social entrepreneurship in post-disaster circumstances, governments should minimize the challenges facing social entrepreneurs, scaling back, at least temporarily, the regulatory burdens developed in non-disaster contexts. Specifically, policy makers should be clear about which regulations will stay in force and which they intend to relax (and for how long) since uncertainty about the regulatory environment hampers social-entrepreneurial activity and, consequently, socioeconomic recovery.
To this end, governments at every level should consider creating an alternative regulatory regime that would automatically take effect after a major disaster. Creating, prior to a crisis, a post-disaster regulatory regime that reduces burdens on social entrepreneurs would allow decision makers the freedom to more soberly consider the tradeoffs between efforts to protect consumers and the need for a fast recovery. Such an alternative scheme would reduce delays that result when governments are forced to make ad-hoc regulatory concessions after a disaster. An alternative regime would also reduce non-compliance, as social entrepreneurs would have a clearer sense of which regulations government officials intend to enforce or are unwilling to change, and which they are willing to disregard. In the months following Hurricane Katrina, for example, New Orleans was forced to bend or break a number of rules—like the inspection suspension—in order to move the recovery process along, and some unworkable regulations have been subject to widespread evasion.
Cities, counties, and states should carefully examine and coordinate their regulatory regimes to determine which could and should be relaxed after a disaster. Careful consideration of the experiences of other jurisdictions that have faced major disasters should aid jurisdictions in determining which changes to regulatory regimes work and which do not.
Let social entrepreneurs step in as soon as possible.
After a disaster, conditions in the affected area can be both dynamic and confusing. Those with access to local knowledge are often in the best position to assess local conditions and needs, particularly in a rapidly changing environment.
Many government-led responses to disaster encounter impediments because, though officials possess requisite expertise, they may lack the local knowledge needed to apply that expertise effectively. Local social entrepreneurs, on the other hand, succeed in post-disaster environments, as in non-disaster ones, because they are integral to the community. Thus they possess local knowledge and can act to meet the specific needs of their communities.
Social entrepreneurs, moreover, learn quickly when their efforts are not useful, while the feedback mechanisms that guide entrepreneurial activity are less readily available to government officials. Social entrepreneurs who behave in socially desirable ways and provide useful services gain both support and reputation. Those who do not are unable to operate because they lack the necessary local support. After a disaster, these signals can be an important mechanism for attracting the kinds of resources and services that are needed most.
Policy makers tend to focus on government responses to disaster, equating successful recovery with sufficient government investment in disaster areas. However, the role that social entrepreneurs play in recovery should not be undervalued. Social entrepreneurs promote the social and physical well-being of their communities, providing key services and helping displaced residents to solve the collective action problem that complicates their decisions about whether and when to return. If recovery efforts are to succeed, policy makers must ensure that regulations create conditions conducive to social entrepreneurship.
 George Lipsitz, “Learning from New Orleans: The Social Warrant of Hostile Privatism and Competitive Consumer Citizenship,” Cultural Anthropology 21, no. 3 (2006): 451–468.
 Alvord et al., “Social Entrepreneurship,” 261.
 Gillian Sullivan Mort, Jay Weerawardena, and Kashonia Carnegie, “Social Entrepreneurship: Towards Conceptualization,” International Journal of Nonprofit and Voluntary Sector Marketing 8, no. 1 (2003): 76–88.
 Alvord et al., “Social Entrepreneurship,” 262.
 Ibid., 270.
 For a poignant example, see Flavia Agnes’ efforts at the Women’s Centre in Bombay.
 For an exploration of the subject, see Emily Chamlee-Wright, “Discovery and Social Learning in Non-Priced Environments: An Austrian View of Social Network Theory,” The Review of Austrian Economics, forthcoming. Stated another way, they must enjoy high status and a good reputation.
 Leslie Eaton, “New Orleans Recovery Is Slowed by Closed Hospitals,” The New York Times, July 24, 2007, http://www.nytimes.com/2007/07/24/us/24orleans.html; Daniel Rothschild, “Nursing the Ninth Ward,” The Wall Street Journal, August 11, 2007, http://www.mercatus.org/MediaDetails.aspx?id=22130.
 See Stone Phillips, “Postcard from New Orleans,” Dateline NBC, June 15, 2007,
 Interview by the Mercatus Center with Casey Kasim, New Orleans, March 2007.
 David Skarbek, “Occupational Licensing and Asymmetric Information: Post-Hurricane Evidence from Florida,” The Cato Journal 28, no. 1 (2008).
 Emily Chamlee-Wright, “The Long Road Back: Signal Noise in the Post-Katrina Context,” The Independent Review 12, no. 2 (2007): 235–259.
 For a further discussion, see Emily Chamlee-Wright and Daniel M. Rothschild, Disastrous Uncertainty: How Government Disaster Policy Undermines Community Rebound, Mercatus Policy Series, Policy Comment No. 9 (Arlington, VA: Mercatus Center at George Mason University, 2007), http://www.mercatus.org/PublicationDetails.aspx?id=17710.