Transactions and friction as concepts to guide disaster recovery policy

Abstract

Large-scale disaster events in Japan (2011), New Zealand (2011), Chile (2010), and China (2008) generate a need for understanding the dynamics of multilocation disaster recovery. This article uses analogs from contemporary economic theory to model recovery interactions over time and over large geographic areas. The model consists of the external and internal sectors and how they engage in transactions during the recovery period. The concept of transaction is developed and its use as a policy tool explored. The concepts of friction and uncertainty are introduced as barriers to efficient and effective completion of the transactions needed for recovery. Friction adds time and resource costs, while uncertainty slows the completion of transactions entered into by recovery stakeholders.