Dispatchable capital … and an announcement

A defining characteristic of community resilience … is that resilience includes multiple dimensions … encompassed by six assets (or “capitals”) across a community: natural, built, financial, human, social and political. – National Academies

Recently, I had occasion to read the National Academies’ report on building and measuring community resilience ( from which the quote above was taken; the report is available here). Jennifer Adams and I are working on a paper together on the application of stress testing (as is done by financial institutions) to communities, and this report will be one of the references. Together these prompted me to rethink what it means for a community to become more resilient.

In the quote above the National Academies’ committee refers to Flora and Flora’s seven community capitals (BTW – I wonder why they didn’t include “cultural capital.”). They lament – accurately – that few (I would say “none!”) of the tools that claim to measure community resilience actually measure all of these. I think there are several reasons for this:

• We know these community capitals are important for resilience, but we really don’t have a common framework that ties them together;
• Lacking this common framework, it’s not clear what we should be measuring (e.g., the “currency” for each type of capital);
• We know they are – or at least should be – important for resilience, but we lack a detailed basis for applying that knowledge in our communities;
• Specifically, this means that we’re not exactly sure what impact increasing one or more of these capitals has on a community’s resilience.

In the following, I’m going to focus on recovery from disaster, as well as the nature of capital. I’m going to create a new phrase – dispatchable capital or assets – to try to tie these two together.

Those of you who’ve stuck with me for a while probably recognize that most of my writings on community resilience have been aimed at systematizing the concept and making it more of a scientific field of study. My motivation has been that by doing so we can build up a cohort of community resilience “technologists” who will use the science to make our communities better. As part of that effort, about two years ago, I developed what I called a practitioner’s model of community resilience.

This was based on my attempt to weave together several intellectual skeins to help me make better sense of all of the information that’s out there. I was heavily influenced by the modeling work of Scott Miles, Cimellaro, Florio and others; the “indicators” work of Cutter (and a host of others); and conversations with Liesel Ritchie and with the COPEWELL team at Johns Hopkins (This is not to tar them with my own brush – my mistakes are my own! – but merely to establish that I pay attention to what others are thinking.). The model was presented as

Functionality =
Initial Functionality + Direct Impacts + Indirect Impacts + Competence•Resources,
for each part of the community

The cartoon below is intended to illustrate what the words mean. If a disaster occurs, each of the community’s “common functions” (e.g., providing water, providing shelter) undergoes direct and indirect impacts. These give rise to a loss of functionality (denoted as L on the cartoon). The community recovers that functionality by deploying resources (R). Its competence in doing so (w) can be thought of as its efficiency in using resources.

Let me take a wild leap here – think of the resources to be deployed as community capital. Since physical damage (e.g., to infrastructure) from a natural disaster will require financial capital for recovery, I’ll look at that first and then try to generalize to other types of community capital. Liquidity is a term often used in finance which simply represents how easily a financial asset can be deployed. Cash is the most liquid asset a community may have available; land is probably the least liquid asset most communities have. Since we’re thinking in terms of recovery from a disaster, i.e., a long time – I’m going to use the term “dispatchable” capital to represent capital we can employ for recovery from a disaster (this parallels the idea of dispatchable electricity generation that can be immediately deployed to meet changes in demand). In terms of finance, this could mean a local government’s Rainy Day Fund, homeowners’ insurance and savings, and could include federal grants triggered by a Presidential declaration (depending on the time frame).

Recovery from a natural disaster will, of course, require other types of capital as well. Damage to neighborhoods will require human capital. People to prepare permits, building inspectors, construction craftsmen and other will be needed to recover from disaster. Lack of any one of these will hinder recovery. For example, one of the factors that held New Orleans back after Katrina was that the demand for construction professionals exceeded the supply. In Dan Alesch’s great little book about long-term recovery, he cites similar examples relating to permit writers. For most communities, there will be personnel who can do the job, but simply not enough of them, i.e., not enough dispatchable capital. In addition,m different sorts of disasters require a varying mix of capitals, e.g., social unrest requires less financial capital but more institutional and social. A pandemic may make higher demands on both social and built capital.

To me this implies that more resilient communities have more of the dispatchable community capital they need for the risks they face. I know this isn’t particularly profound but I think it’s useful. If a community looks at a particular risk it faces, community capitals provide a systematic way to look at what’s required for recovery. If the community wants to become more resilient, it has to ensure that the amount of dispatchable capital – financial, human, and so on that can be readily deployed – it has will meet the demand. In some cases, that may mean setting up special financial reserve funds. It may mean cross-training personnel to handle increased demand. It may mean designating areas to be used for large amounts of debris. Or, the systematic look may show that there is sufficient dispatchable capital to meet the heightened demands of a recovering community.

And what about that “systematic look?” The National Academies’ report acknowledges the need to look at community capital, but doesn’t take the next step to actually explicitly state what that really means. In a paper I wrote for a conference three years ago, I concluded that

None of them [the community resilience measurement systems] examines community finance (e.g., insurance in the private sector or creditworthiness in the public sector), yet financial resources are essential for recovery. None of them gives more than a glance at the community’s governance (how and how well decisions are made and implemented), yet the depth of the disaster, and the duration and ultimate success of the recovery directly depend on the community’s governance. Rather surprisingly, little light is shone on the vulnerability of the natural environment, primarily because of a lack of data. For the same reason, those approaches that rely on publicly available data also provide decision-makers with little information about infrastructural resilience.

If our goal is to have a resilient community, determining how much dispatchable capital it has and will need is an important step toward that goal. In this context, recovery from extreme events depends on dispatchable capital, i.e., increasing community resilience means accumulating community capital, of all types. Our measurement systems don’t address this – yet – but they should. I hope the concept of dispatchable capital can spark discussions about how to improve them.


A head’s up…

Though all of us involved with CARRI remain active in the field, none of our work is being funded through CARRI. As a result, we are going to retire the name and – more importantly – close down the website. We appreciate the work done by the Meridian Institute to maintain the site and provide us with email and other services, even without a return on that investment. Thus, this is the last of my blogs that will be posted here. We are fortunate to have several options open to us; we’ll be making a decision early in September. I intend to continue to be an intellectual provocateur (or to clutter your inbox, if you prefer). I appreciate the time you spend with me.