This project will develop and test a series of inter-connected theories about the economic, social, and political processes that influence the recovery from large-scale losses of population and economic assets following a natural disaster. A key element is to evaluate the impact of external aid and the form of aid delivery on local behaviors, networks and institutions, as well as long term growth and inequality. The analysis focuses on coastal villages in Aceh, Indonesia, that were differentially affected by the 2004 tsunami, and will make use of a panel data set (initiated in 2005) of 111 villages and 550 fishing boat owners that contains rich detail on local economic and political institutions, interaction of villages with external institutions, population change, and trauma suffered. A subsequent round of the survey using previously committed resources is now being collected, which adds another 100 villages and 200 new boat owners. We propose two additional rounds of the survey, creating a panel from 2005 to 2013. The project brings together USA and Indonesian experts on issues of community development, health, the environment, political economy, and inequality. Recovery of village population and health is importantly linked not just to the availability of individual economic opportunities to different strata of the population and to potential migrants, but to the extent to which the local village is able to mobilize both local and external resources to rebuild. Central in mobilization is the aid process. This application emphasizes four central tradeoffs that appear to have played an important role in the recovery process thus far: a) the "adoption" of a village by an external aid agency to garner more aid versus a loss in the degree of local autonomy and ability to marshal local volunteer labor;b) allocation of assets through aid agencies on a more equitable basis versus allocation based on differences in expertise;c) village leadership with greater technical competence and ability to deal with aid and government recovery agencies versus leadership that is well positioned within local economic and social networks;and d) incorporation of modern institutions as part of the aid process such as formal titling of assets that may increase returns to private investment at the expense of investment in public resources. This project will investigate these trade-offs and the efficacy of the aid process in the context of examining the recovery process of villages and fishing firms. It will investigate the reemergence of patterns of inequality, where the destruction of the tsunami and the aid process had a strong equalizing effect. It will study how the ability to marshal local investment in public resources is affected by wide-scale population losses, personal trauma, aid and its form of delivery, losses of village leaders, and pre-existing social networks. It will examine the efficacy of aid in achieving "sustainable development," with a particular focus on the adoption of modern market institutions to supplant traditional institutions, given village social and political processes. Finally it will study how recovery of fishing firms is affected by the aid process, regulation, and trauma.
The research in this application would facilitate the analysis and design of effective aid responses to large scale losses in population and economic assets in low-income areas following a natural disaster. The focus of this work is on how external and internal resources and institutions can best be integrated to promote population recovery and health through long-term equitable and sustainable economic growth.