Tuesday, May 13, 2008

Postdiluvian New Orleans

Here's the Atlantic from one year ago describing the New Orleans public school system in the aftermath of Huricane Katrina.

Stripped of most of its domain and financing, the Orleans Parish School Board fired all 7,500 of its teachers and support staff, effectively breaking the teachers’ union. And the Bush administration stepped in with millions of dollars for the expansion of charter schools—publicly financed but independently run schools that answer to their own boards. The result was the fastest makeover of an urban school system in American history.


According to the New York Times last week, test scores are up quite a bit, although still not great. This is what you would expect with a more liberal school system where the unions have less power, and it's nice to see (HT Alex Tabarrok).

Also, see this Megan McArdle post about Bobby Jindal. The Hurricane seems to have shocked Louisiana into actually reforming it's notoriously corrupt government.

The current fad in development economics is the importance of institutions. However, it appears that in developed countries institutions can be destroyed but society will come back better than ever. We know developed countries are much better at recovering from a natural disaster or war than developing nations. The tremendous growth of post World War II European countries and Japan is the best example of this. I used to think this quick recovery was merely the result of quick recoveries due to the survival of human capital. But now I see in many cases very inefficient institutions have been built up in developed societies, and they can be rebuilt much better from scratch after they have been wiped out. These institutions can be destructive like the unions, rent seeking businesses, and corrupt governmental arrangements, but become entrenched. It takes something unique to dislodge them. Perhaps a disaster is more likely than a very brave, principled, and popular politician. After the cost in life of the disaster (which generally far outweighs the gains of post disaster development), many societies seem to be better off after they are rebuilt. This is painful to the Burkian in me, but my thinking is that it is true.

Note: I'm not saving Louisiana is better off now, just as France wasn't more prosperous in 1948 than before the war. However, there are signs that the state could be making tremendous progress that will significantly change how it will be 20 years later, like 1965 France.

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