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1 - The six major earthquakes affecting Santiago in the twentieth century are summarized in the following table. Sources: "Sismos del siglo xx en Chile", October 20, 1998, http :// and "Sismos destructores que han afectado a Chile desde el año 1939 hasta 1987 (49 años)", Anexo 3a, El Sector Salud de Chile y Su Rol Frente a Consecuencias y Desastres Naturales, Ministerio de Salud, Departamento Emergencias y Desastres, 1991. It was not clear if the dollar amounts shown are in real terms or nominative.

Epicenter or most affected areas
Mercalli scale
(12 max)
Losses (US$)
10 or 11
101,500 152,382,988
Santiago to Coquimbo
Santiago and regions 5, 6, and 7

2 - The critique of central planning by Friedrich A. von Hayek and Ludwig von Mises, commonly known as the Austrian knowledge problem, argues that planners will fail to provide public goods and services efficiently, and perhaps not even effectively, since social knowledge is dispersed and fragmented. Even the most erudite and well intentioned planners can not expect to garner enough knowledge to make optimal decisions in the public interest, and certainly not decisions that take into account the subjective preferences of all those in society. Leonard Reid, followed by Milton Friedman, further argued that no one has the requisite knowledge to make something as simple as a pencil on account of all the knowledge that goes into its production. Note that the knowledge problem is not simply imperfect information. Every businessman faces uncertainty and imperfections in information, especially regarding the future. The knowledge problem suggests that it is impossible for government planners to allocate resources or production correctly since they cannot know the pertinent information that is implicit in prices and the market. Firms, as groups of individuals specializing in certain production, can make accurate and profitable local decisions based on cost-benefit expectations. Even though their forecasts will be in error at times, it is at least possible for them to be correct (unlike planners) and, in fact, solvent firms will be correct most of the time. The knowledge problem might partially be alleviated by technology. For instance, the internet seems to be a useful means of updating and disseminating safety regulation information (Gerber 1997, p. 9). However, technology can not come close to wholly or even mostly eliminating the knowledge problem.

3 - Public choices are made when one person's decision is also a decision for another person (or vice-versa). Public choice theory has burst the once-dominant romantic vision of politics by suggesting that people are self-interested in all choices, including public choices. Hence, political actors primarily pursue their own self-interest, leading to distortions in the political process and public provision of goods, services, and regulation (see William C. Mitchell and Randy T. Simmons (1994), Beyond Politics: Markets, Welfare, and the Failure of Bureaucracy, Westview Press: San Francisco, California for an excellent overview of the theory).

4 - Not only schools are affected by fire safety codes. In Seattle, "new fire codes forced many building owners to close their hotels and apartments rather than make expensive repairs" during the 1970s (Wong and Chinn 1995), although some were renovated and now provide good quality low income housing (Del Rosario 1994).

5 - Despite regulatory examples to the contrary, the poor physical condition of a school does not always lead to its closure. Apparently, some schools are not in good (or even safe) operating condition yet continue their business. The Colorado School for the Deaf and the Blind in Colorado Springs reported a wide variety of structural and heating problems, then asked for state assistance to build a residential facility, which would enable the school to demolish some poor quality structures presently being used for that purpose (Thomsen 1997, p. 15A).

6 - Ley numero 4,563 (February 14, 1929).

7 - Much of this information was obtained from fact sheets prepared by the Cuerpo de Bomberos de Santiago or from comments made by Armando Oyarzún Figueroa, Technical Secretary, on July 22, 1998 (3:30pm-4:30pm) or on October 19, 1998 (4:15pm-4:45pm) or on January 8, 1999 (3:45pm-4:45pm) and January 11, 1999 (1:00-1:30pm) at the Cuerpo de Bomberos de Santiago headquaters, Santo Domingo 978, Santiago.

8 - Ibid.

9 - Many such details were obtained from Cuerpo de Bomberos de Santiago, specifically Patricio Contreras, an accountant in the payroll department, in a conversation at their offices on November 27, 1998 (11:00am and 3:45pm) or Cristián Amunategui, institutional manager and assistant to the general secretary who I spoke to on various occasions during my data collection in September to November 1998 in the archives of the Cuerpo de Bomberos de Santiago headquaters, Santo Domingo 978, Santiago. +56-2-672-1204, fax +56-2-695-0113.

10 - Conversations with Cuerpo de Bomberos de Ñuñoa, with a pair of staff members, and also with Cuerpo de Bomberos de Santiago, with Armando Oyarzún Figueroa, Technical Secretary, on October 19, 1998 (4:15pm-4:45pm) and at other times with Cristián Amunategui, institutional manager and assistant to the general secretary.

11 - Data requests were sent by fax in early December 1998 to each of the comunas in eastern Santiago.

12 - Apparently, medic runs (i.e., non fire runs) were being included in the count. Hence, I may have received inflated numbers for the years 1989 to 1994. Unfortunately, it appears that the records from those years have been destroyed, since BFD is only required to keep 3 to 5 years of records. Thus, we have not yet checked those figures (and may never be able to). I asked Captain Morris how this error could have occurred and he said that the woman who was keeping the records at that time had a drug problem and had to be fired on account of it. It is possible that she was the source of the error. The dramatic reduction in the number of structural fires since 1994 does not change the overall findings in my book Building Regulation, Market Alternatives, and Allodial Policy (chapter 1), it would suggest that the increase in structural fires per capita has been less dramatic. Future users of the data set should note that years 1989 to 1993 are suspect. While the figures for those years may well be accurate, they may be inflated by perhaps 30%. There is no way of knowing for sure at this point. The data keeping process is still not computerized at BFD which made me question whether Morris was in effect able track the number of fires accurately. The dramatic drop from 1994 to 1995 struck me as quite odd. Such variance, if accurate, would be remarkable to say the least. Thus, we might as well suspect all fire data after 1988 to some extent. Morris seemed quite confident in the 1994 to 1997 figures, but I would not be surprised if further scrutiny would result in changes to them. One thing I am sure of is that when I was copying the numbers from the data sheets in 1995, I was very careful to obtain the correct information. The only possible flaw would be if someone in the back office had indeed recorded inaccurate information which was then passed on to me. Barring that, I have more confidence in my method of collection than the current data system utilized by BFD. Therefore, for my research purposes, I will be changing the 1994 number and leaving the rest as it is. Until further information can be obtained, I would suggest that others using the data set do likewise.

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