Rebuilding without deepening regional gaps

Damage is not distributed evenly, so reconstruction spending will not be either. That is the right principle. It nonetheless creates a set of effects that a programme should anticipate rather than discover.

The two opposite risks

The first is that heavily damaged regions receive large investment, get rebuilt to modern standards, and end up with better infrastructure than regions that were not damaged and therefore received nothing. Undamaged does not mean well-served: a western district with a fifty-year-old school and no damage has a real claim and no basis for a reconstruction grant.

The second is the reverse: money concentrates where absorption capacity is highest, which is the safer regions with functioning administrations and available contractors, and the damaged areas are left waiting because they are harder to work in.

Both have happened in other recoveries, and which one occurs depends on how allocation is designed.

What mitigates it

A published allocation formula, so that the distribution can be examined and argued about openly.

Capacity support targeted at the weakest administrations, because a community that cannot prepare a project will not receive funds however great its need.

And a separate, ordinary regional development budget running alongside reconstruction, so that undamaged but poor regions are not competing against damage.

Why to say it now

Because regional resentment is easier to prevent than to repair, and it is produced by allocation decisions that seem technical at the time.

I can already see this imbalance in the equipment orders: enquiries arrive from some regions repeatedly and from others not at all. It is right that money follows damage; but an undamaged region still needs its roads, schools and networks maintained, and that budget is now going elsewhere. Saying so now is far cheaper than trying to correct it in ten years.