centives for others to share in the process and burdens of prevention and preparedness, the federal government must convince the public that it will not do everything. But if other parties are to prepare, they do so in the knowledge that in an extreme situation, government may act to distribute the benefits of their preparations over the society as a whole. A policy of no federal preparations would force preparations and responses to be decentralized, but it would become politically untenable in a serious emergency.
There is also a significant danger that, in trying to shift some of the preparedness burden to the rest of society, the federal government may bring about the worst of both worlds: it may limit its own preparations as part of an effort to underscore the need for action elsewhere, yet fail to be convincing enough in this effort to actually trigger such action. If this happened, the federal role might be smaller than it should be in a severe emergency because of inadequate federal preparation; in a moderate emergency, it might be larger than it should be because of the inadequate preparation made by others.
A central empirical fact helps define the federal role: private parties seldom prepare adequately-for emergencies (Kunreuther et al., 1978; Slovic et al., 1977). As a result, if private initiatives alone are relied on, many people and organizations will be unprepared (Kunreuther et al., 1978; Slovic et al., 1977, 1978; Meade, 1970).4 When the federal government makes emergency preparations to fill a gap, those programs may deter decentralized preparations, and, as we have already noted, a decentralized approach seems necessary.5 In addition, when the federal government can be expected to deal with the impact of an emergency, such as by offering disaster relief, others are unlikely to invest in disaster insurance or other individual preparations.
Experience demonstrates that when people are not prepared and suffer greatly, the government will tend to meet their needs even in the absence of stated policies; in effect, people who fail to prepare are rewarded as “free riders,” while people who have prepared are penalized. It can be hard to persuade people that this experience will not repeat itself. And the more that people believe the government will intervene, the more necessary that intervention will become.
In principle, one way for the federal government to maximize decentralized responsibility for handling an energy supply disruption is to offer no policy at all. If the federal government refuses to rescue individuals, private organizations, and local government, these groups will be forced to make their own preparations and find their own ways to respond.
The “no policy” policy does, indeed, seem an effective way to allocate