+Kousky, Carolyn, Erzo F.P. Luttmer & Richard Zeckhauser, Private Investment and Government Protection (Harvard University, John F. Kennedy School of Government, Faculty Research Working Papers Series, RWP06-017) (May 1, 2006) (PDF — 374K)
"The devastation wrought by hurricane Katrina along the Gulf Coast has once again reminded citizens, policymakers, and academics of the difficulties of making decisions regarding development in risk-prone locations. This paper has highlighted that government does not face a simple decision of how much protection to offer investments, nor do private entities face a simple decision of how much to invest in an area with a given risk level. Instead, government and investors respond to each other, with investment increasing when protection levels are raised, and government raising protection when investment in a risky location grows. When the marginal value of protection increases with the level of protection provided, the game may have multiple equilibria. Thus, given an ill-behaved benefits function, a local optimum may not be the global optimum, which complicates policy decisions, as does the uncertainty regarding the level of investment that will follow a given level of protection."—Conclusion.
"In 2005, two events garnered great national attention: the controversy over the death of Terri Schiavo and the destruction of New Orleans by Hurricane Katrina. Although each event was compelling and even tragic, only the former, which focused on whether a single individual would be removed from life support, was widely understood as implicating constitutional questions. Using a population-based perspective that is influenced by the discipline of epidemiology and focuses attention on both the interests of and the impact of law on populations, this Article analyzes why a controversy concerning the life and death of one woman was understood as raising questions of constitutional law while the failure to protect thousands was not viewed as such. The Article begins reviewing the courts' embrace of an individualistic right-to-reject treatment in cases such as Cruzan v. Director, Missouri Department of Health and contrasting that embrace with the Supreme Court's rejection, in cases such as DeShaney v. Winnebago County Department of Social Services, of any broad right to care and protection. Taken together, these cases demonstrate that contemporary constitutional law fails to appreciate the interdependency of risk and the social and population context in which health threats, and treatment decisions, arise. As a result, the rights vindicated in cases such as Cruzan and Schiavo are particularly shallow as they cannot provide either individuals or populations (such as that in New Orleans) with the opportunity to make meaningful risk-reducing choices. In addition, because of the influence of constitutional discourse in our society, the shallowness of constitutional rights spills over to influence political and legislative priorities. Hence, the fact that the population of New Orleans had no legally recognizable constitutional right to protection against hurricanes may have abetted the government's failure to protect the city's residents. Likewise, a constitutional discourse that focuses on the plight of a single woman while overlooking the multitude of problems faced by large populations may reinforce the political system's failure to protect populations from other potential natural disasters, such as a potential influenza pandemic."—Abstract.