Cash not stuff: humanitarian assistance of the future?

Header: Cash Atlas

The logic of providing cash assistance instead of stuff is pretty simple: it’s more efficient and more effective; it’s more accountable; and it allows recipients some sort of agency. Traditional aid is supposed to be needs based, but in the end is subject to global procurement contracts favoring economies of scale, earmarked funding by donors, and the whims of changing global priorities that may result in the distribution of items because they are in the warehouse whether or not the beneficiaries want or need them.

It’s more efficient, because it does not need to be packaged, shipped, and distributed. With low distribution costs, more of the money actually goes to the recipient. It’s more effective, because recipients of blankets or other non-food items may sell them to obtain what they really need (as anyone who has traveled in certain countries and seen the wide range of uses to which UNHCR plastic sheeting has been put). It’s more accountable, because anti-fraud safeguards can be built in, the assistance is attributed to a specific individual or family, and there could be less vulnerability to corruption related to procurement contracts that can plague humanitarian assistance (i.e. USAID suspending funds to major aid groups after finding corruption in Syrian aid pipeline). Finally, cash assistance recognizes that recipients have agency and should be able to decide for themselves what their most important needs are.

And interestingly, cash has impacts in the wider economy, since the money given to the beneficiary is then spent on goods and services in the host community. For example, in an evaluation of the cash assistance programme in Lebanon, the study noted that cash assistance “has significant multiplier effects on the local economy. Each dollar that beneficiaries spend generates 2.13 dollars of GDP for the Lebanese economy.”

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Cash for everyone, right?

It’s not a one-size-fits-all solution nor a panacea, and there are a few preconditions necessary. As World Vision, one of many NGOs involved in provision of cash assistance, describes it, “The ability of cash transfers to deliver their promise fundamentally depends on whether or not they are calculated at a fair value and for a sufficient duration to accomplish the programme objectives. In short, cash transfers are neither a panacea for the global humanitarian financing gap nor a long-term solution to ending conflict, where 80% of humanitarian resources are currently directed.”

First of all, sufficient basic financial infrastructure or systems may be required:

“To realize a global scale-up in cash transfers, countries facing crises must have the necessary infrastructure and financial services in place to make payments safely and efficiently. E-payment mechanisms, including mobile-based money transfers and cardbased payments such as prepaid debit cards, are effective tools that enable efficient and scalable transfers, improve transparency, and mitigate fraud in humanitarian response. However, these tools are not present in all countries. E-payment tools are increasingly common, but as yet impractical in countries with weak digital and financial infrastructure, regulatory environments, and/ or financial institutions.”

Scaling up humanitarian cash transfers

Second, it requires the existence of markets with sufficient supply of basic necessities, which may not exist in remote locations or post-disaster areas.

Third, the programme needs to be designed in a way that mitigates risks of fraud (both in terms of selecting beneficiaries as well as technical protections such as iris scans at ATMs) or of protection vulnerabilities, and programme design will need to think carefully about how to ensure the most vulnerable of the population have access to the services. The targeting strategy will often have to take into consideration competing priorities in different sectors, particularly if the cash assistance is intended to be unconditional and multipurpose. And the programme design will have to consider if the cash assistance programme results in market distortions or inflated prices.

In a survey of available literature evaluating cash programmes, in terms of emowerment (relating to many themes that would often be characterized under the heading of “protection”), the study found that,

“The available evidence shows that transfers can reduce physical abuse of women by men, but also that they may increase non-physical abuse, such as emotional abuse or controlling behaviour. It supports both the theory that increased income lowers stress-related abuse and the theory that increased income enables the woman to bargain out of abuse. The relatively strong evidence that decision-making power increases for women in the beneficiary household also offers substance to this latter theory. Other evidence reveals that risky sexual behaviour and early marriage differ by gender, but for both girls/women and boys/men increased income to an extent lifts the constraints that drive engagement in these behaviours. In the case of women and girls, the evidence that directly or indirectly receiving a transfer reduces the likelihood of having multiple sexual partners indicates that cash transfers may reduce the incidence of relationships that are transactional. Taken together, the evidence in this section points to cash transfers having a positive impact on women’s choices as to fertility and engagement in sexual activity. In the case of men and boys, some of the evidence collected here suggests that cash transfers do not have the same effect of reducing risky sexual activity, and in fact may lead to an increase in this type of behaviour.”

Finally, there are factors such as duration of programme, amount of assistance, gender of main recipient, and timing and frequency of asistance all influence how successful the programme may be in terms of impacts in individual sectors.

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Distribution of Non food items

But does it really do all it says on the tin?

Luckily, cash assistance being in fashion does mean that there are quite a lot of studies interested in measuring its effectiveness, usefulness, and everything else-ness that one could possibly want to measure.

But preliminary findings do indicate that cash assistance has positive impacts on poverty, education, savings, health, nutrition, and empowerment. Employment seems not to be substantially impacted by cash assistance. In the same study surveying available literature evaluating cash programmes, the study findings are as follows:

Monetary poverty

There is a comparatively large evidence base linking cash transfers to reductions in monetary poverty. The evidence extracted consistently shows an increase in total and food expenditure andreduction in Foster–Greer–Thorbecke (FGT) poverty measures.

Education
Overall, the available evidence highlights a clear link between cash transfer receipt and increased school attendance. Less evidence and a less clear-cut pattern of impact is found for learning outcomes (as measured by test scores) and cognitive development outcomes (information processing ability, intelligence, reasoning, language development and memory), although,interestingly, the three studies reporting statistically significant findings on the latter all report improvements in cognitive development associated with cash transfer receipt.
Health and nutrition
Evidence of the impacts of cash transfers across all three indicator areas – use of health services, dietary diversity and anthropometric measures – was largely consistent in terms of direction of effect, showing improvements in the indicators. On the whole, the available evidence highlights how, while the cash transfers reviewed have played an important role in increasing the use of health services and dietary diversity, changes in design or implementation features, including complementary actions (e.g. nutritional supplements or behavioural change training), may be required to achieve greater and more consistent impacts on child anthropometric measures.
Savings, investment and production
Overall, impacts on savings, and on livestock ownership and/or purchase, as well as use and/or purchase of agricultural inputs, are consistent in their direction of effect, with almost all statistically significant findings highlighting positive effects of cash transfers, though these are not universal to all programmes or to all types of livestock and inputs. This is an important finding as, with the exception of one programme, none of the cash transfers analysed focuses explicitly on enhancing productive impacts. Impacts on borrowing, agricultural productive assets and business/enterprise are less clear-cut or are drawn from a smaller evidence base.
Employment
The evidence extracted for this review shows that for just over half of studies on adult work (participation and intensity), the cash transfer does not have a statistically significant impact. Among those studies reporting a significant effect among adults of working age, the majority find an increase in work participation and intensity. In the cases in which a reduction in work participation or work intensity is reported, these reflect a reduction in participation among the elderly, those caring for dependents, or they are the result of reductions in casual work.

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Resources and specific studies:

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