by Chad Thomas

Political and economic conditions in New Orleans before 2005 left the city unprepared for Hurricane Katrina. The government bureaucracies responsible for levee maintenance were mismanaged and corrupt officials diverted needed funds. Weak economic performance before Katrina also set up affected areas for slow recovery afterward. New Orleans’ experience shows how government can make a bad storm worse for vulnerable communities. Florida, also prone to hurricanes, can avoid these mistakes by learning from Katrina.


Over the last half century, several government agencies have been responsible for the levee system in New Orleans. The US Army Corps of Engineers designed and built the project, in consultation with the Orleans Levee Board. This board, a special district government that oversaw the Orleans Levee District, was tasked with maintaining the levees, and it interacted with the local Water and Sewage Board, which was responsible for pumping water from the city via drainage canals. The federal government committed to pay 70 percent of project costs while state and local governments would pay the remaining 30 percent, partly through a property tax within the district. Levee board members were nominated by a local committee, and nominations were then approved by the Governor.

Cooperation between the levee board and the corps dates to the Flood Act of 1965, but proved inefficient and confused. The project was initially expected to be completed in 1978, but was pushed back until 2008 due to disagreements over construction plans and upgrades. Unfortunately, this joint project was unable to build a levee strong enough to endure the storm that hit New Orleans in 2005.

In their 2009 paper, economists Peter Boettke and Daniel Smith concluded that “the poor state of the levees was primarily due to the corruption on the levee board.” The Board chose to install floodgates at one-third the cost of the pump system recommended by the Corps, and to spend funds on projects unrelated to levee maintenance (including salient and popular items like music festivals and education initiatives). In reaction to perceived corruption at the Levee Board, Louisiana passed a constitutional amendment to dissolve the Board in 2006. The Southeast Louisiana Flood Protection Authority (SLFPA) now oversees the levees. However, a  2015 study appearing in the journal Water Policy attributes the 2005 failure to flawed engineering by the Corps, including erroneous measurements and stress tests conducted during construction. Placing blame on the Corps appears to be the new refrain from most experts, but this doesn’t negate the Board’s own mismanagement. Inefficient and confused interactions between multiple government bureaucracies complicated and postponed levee funding, construction, and maintenance.

Additionally, poor economic performance before Katrina contributed to Louisiana’s slow recovery. Between 1997-2003, Louisiana ranked 49th for average annual gross state product growth, with a rate of 0.2 percent. The state ranked 40th on the Pacific Research Institute’s Economic Freedom of the States Index, due to its excessive barriers to entrepreneurship and labor competitiveness. Boettke and Smith (2009) posit that strong economies with entrepreneurship are more resilient to shocks, like storms and other catastrophic events. These barriers to growth probably discouraged Katrina evacuees from returning where economic opportunity was already limited.

Corruption in Louisiana has also been a persistent problem. According to a report by Corporate Crime Reporter, Louisiana was ranked the third most corrupt state in the nation in 2004. In post-Katrina Louisiana, officials diverted funds away from recovery projects. Natural disasters are often accompanied by corruption, as federal relief funds provide local officials with opportunities for graft. New Orleans public corruption and government fraud cases increased 243 percent during 2006-2008 compared with pre-Katrina years, as fraudulent claims for federal assistance poured into the FBI. Mismanagement at the Federal Emergency Management Agency (FEMA) also played a role. The Bush Administration’s appointments to FEMA tended to be based on political connections rather than logistics experience.

The case of New Orleans shows how poor governance can make a natural disaster into an unnatural catastrophe. In Florida, relatively strong economic performance and more fiscally conservative government spending make the state less vulnerable, but public corruption and barriers to entrepreneurship remain as potential problems that could exacerbate storm recovery. Learning from Louisiana’s mistakes is vital to Florida’s resilience in the face of inevitable hurricanes to come.

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