When the NY Times soon starts its “pay per click” system, will bloggers actually be forced to write something interesting rather than merely being lazy and linking to another story? The OP-ED I just linked to reviews the recent history of how Japan has used engineering investments to counteract Mother Nature. It hints that Japan was lulled into complacency by technological optimists who believed that engineering investment could protect the coast.
To economists, there are at least two interesting questions here. First, what is the “optimal” amount for a rich nation to invest in its coastal defenses? Second, what are the unintended consequences of such investments? If people are lulled into feeling safe, then can such investments actually increase risk exposure as individuals reduce their own private self-protection efforts? In econ jargon, does government investment in protection “crowd out” private self protection? If a benevolent government anticipates this behavioral response, how should it design its coastal defenses?