Recovery Needs Firms: Why Reconstruction Money Can Liquefy into Rents

A sample case-study structure for recovery economics.

Problem

Reconstruction spending without local productive capacity risks becoming rent extraction and stranded assets.

Mechanism

When local firms cannot produce, external procurement dominates; funds circulate among intermediaries; jobs do not return; expectations remain negative.

Implication

Recovery strategy must treat firms as the central engine: access to inputs, predictable rules, risk management, and demand pathways.