State Capacity in Humanitarian Supply Chains : Determining the Government’s Role in Managing Natural Disasters

Humanitarian supply chains play a crucial role in mitigating the damage caused by natural disasters. They significantly differ from ordinary commodity supply chains on account of the intractable uncertainty and novelty of situations to which they cater to. Opinions are starkly divided on the role of the state in operating the humanitarian supply chains in a sovereign nation. On one hand, non-state entities such as NGOs, corporations, local relief entities, international humanitarian organizations seek involvement in aid operations primarily due to the financial scale and commercial attractiveness of the sector. On the other hand, state-led disaster management institutions seek administrative autonomy and comprehensive security for citizens by leading the relief efforts. This paper argues that the commonly discussed state-linked problems of shared accountability, horizontal externalities, and leakages due to governmental corruption are problems of inefficiency and poor implementation, and not systemic issues linked to structural inadequacies. There is academic evidence to show that public welfare expenses in immediate disaster relief mitigates long term social costs of recovery and brings down volumes of corruption. State involvement also contributes to operational efficiency due to larger scale of operations, reduced transaction costs ensuring direct utilization of funds, and higher asset utilization potential through resource fluidity and relaxations on earmarked funding. A coordinated, hierarchical network model is proposed which is inspired by commercial FMCG supply chain networks. The highlight of the model is a collaborative distributed network of aid entities, with centralized state-led decision making authority at higher echelons and gradually dispersed, decentralized autonomy down the network. This ensures the benefits of scale, resource mobilization, and greater risk capacity at the higher levels of the network, and the advantage of well penetrated local presence, regional awareness, and quick response time at the lower echelons