What’s the fuss about Cash? Disruption & Innovation in International Humanitarian Relief & Development

see the original post at https://pcdnetwork.org/blogs/whats-fuss-cash-coming-disruption-innovation-international-humanitarian-relief-development/
On the last day of the Interaction Forum 2016, I attended a great workshop on What’s the Fuss about Cash which looked at the increasing use of cash transfers in humanitarian relief.
Giving cash transfers in humanitarian contexts is becoming an increasingly popular approach, going beyond a pilot phase to more sustained programming. The Cash Learning Partnership (CaLP), a global network convening 150 leading organizations and 5,000 practitioners working in this space, has played a key role in helping to convene, document and share information on best practices.

The panel included:

Dina Brick, Senior Technical Advisor, Cash and Markets, Catholic Relief Services
Emily Farr, Senior Advisor, Oxfam International 
Greg Matthews, International Rescue Committee

The session was moderated by Jenny Coneff, Cash Learning Partnership

Coneff outlined some of the key background for convening the panel. Cash transfers are a hot topic for several reasons. First, with the upcoming World humanitarian Summit in May there is debate about the role of cash transfer in humanitarian and early recovery programming. Within USAID there is a debate about role of cash as well, particularly around food assistance.

Cash transfers represent 6% of humanitarian assistance in 2014, according to a report by the Overseas Development Institute. Cash also has multiplier effects on local economy, dignity and many other positive factors as validated by years of research.

However, much of the humanitarian architecture has been setup to provide in-kind contributions Thus, trying to increase the use of cash is challenging within a system that isn’t setup to support financial services. Second cash transfers often cross several programming areas, make it hard to track within sector specific programming.

Matthews began a discussion about the state of research on cash transfers. As he explained they are one of the most rigorously studied field in the social sciences. There have been over 200 studies of the process, including randomized control trials. A lot of this has come from government programs that may not touch on the humanitarian system. He stressed we can transfer many of the results to have a sense of what works, challenges and lessons.

According to Mathews, what do we know? Cash works overall for food security programming. This is one of the most researched areas. We know that giving people cash enables access to food. We know that cash transfers are effective at providing material assistance, replacing in-kind donations if markets are adequately functioning. There is slightly less evidence showing effectiveness in livelihoods.

He also stressed that cash transfers have strong multiple effects compared to other means of aid. He cited one IRC study in Lebanon showed that cash transfers have a $2 + impact beyond the funds provided.

He stressed cash will not replace everything and not a magic solution .Cash will not replace vaccines, specialized services, etc.
Cash can help address community level and household level gaps in livelihoods, but will not address supply constraints. Cash can be more effective also when combined with other interventions.

Some areas where we have good ideas, but don’t have research yet include, protection programs. Some research says it can help prevent negative coping strategies. Some research from the Syrian context shows it can can help prevent intimate partner violence. In addition can help with food insecurity and even to deliver the material for shelter needs in emergencies.

In terms of efficiency when compared to in-kind transfers cash transfers can be more cost effective when delivering at scale. The key challenge is the scale of in-kind program is massive and the infrastructure is huge. We don’t have the evidence to date compare as while cash-transfers have been growing, there isn’t equivalent comparison project done by cash transfer approaches to date.

Some interesting data points, in one four country study, they found that 18% more people could have been reached if cash transfers has been used. In another study, of food aid, shows that cash transfers would be 25% more cost effective.

Another big category is how appropriate are cash transfers. One key question is if the market is strong enough. What are the risks compared to other approaches? Also how will houses use the transfers.

The literature tells us that markets are responsive. They are often functioning even in places hard to imagine. There are lessons how to best direct transfers in challenging market situations.
Cash can strengthen market systems as well as household levels. Cash creates incentives to make markets work, they can draw in market actors to address the shortages.

A key aspects cash programming alone will not address significant supply constraints. Other things need to be done as well and it is important to not oversell that cash is the magic solution to all.

In terms of safety risks, there have been some studies on how can affect communities and households. One study from the Philippines showed that cash transfers helped make social cohesion stronger at the community level. This helped to reduce the ability of armed actors to recruit people. Cash transfers can promote protection of women and girls. They can also reduce targeting of individuals by others. This can be because cash transfers can be very discrete, often electronic. No big box or easy target.

A key question is how do we know where the cash is going? Matthews asked how do we know it isn’t going to tobacco , alcohol, drugs, arms, to armed groups. He stressed that all forms of aid can be used for different purposes. Research shows in general that when people receive cash they generally spent it where they need it most, not on tobacco, firearms, etc.

In terms of where it can be used there are a few key issues:

1) System – If there is a system setup makes things much easier. if not can setup to them but more difficult. Financial services is key and building on local systems.
2)Governments need to be on board – If they are on board makes it much easier.
3)Humanitarian Contexts – It’s possible and feasible to do vouchers and cash transfers. This is being done in Syria, Iraq, Somali (was done at scale). But there are contextual factors that need to be taken into account to make sure it is doable and takes extra work to bring in key stakeholders.
4)To look at power and who makes decisions – Sometimes cash transfers can reinforce divides, for example if it is a unconditional transfers this can disempower women if their husbands take control of cash. However, one way to deal with this might be make it a conditional cash transfer or voucher for food, which in many contexts women might be more likely to do shopping. In short, protection concerns need to be factored into all aspects of the process.
5)To look at who is excluded – To also examine who is not receiving cash or who might be excluded.
6)Preparedness is key – But it is also very challenging as Brick said to know where the next humanitarian emergency will be. A lot of coordination and planning needs to happen prior to an emergency.
7)The humanitarian system is inadequate – The current system isn’t setup well for cash transfers. Cash transfers are multi-sectoral but the system isn’t designed to track this effectively as a humanitarian cluster system doesn’t support multi-sectoral approaches.. A key question what do you when cash comes in and it is multi-sectoral, where does it sit?
8)Is Cash the Best – Sometimes cash may be more effective but other times it isn’t. Have a theory of change and casual analysis about what change is desired can be key.
9)It’s not a matter of if but when – It is very clear that the growth of cash transfer approaches is likely to grow. There will be also many unforeseen impacts to the system. DFID is currently working on some data that suggests that 40% or more of food aid and many other sectors of program could be replaced by cash aid.
10)Markets are key – Cash based transfers will not work well if there Isn’t an adequately functioning market based system (at least to some degree)
11)Disruption is coming – The increasing use of cash transfers will lead to large changes in how aid is delivered, what are the staffing needs, etc. For example there will be less need for logistics and shipping to get aid overseas. There will be a lot more need of geeks for good, people with tech skills to build platform, big data analysts, financial services and other areas. There was a long discussion that this change will produce new jobs but also may lead to radical changes in how organizations are staffed and perhaps see decreases in many traditional humanitarian positions. There will also need to changes in mindsets within organizations.
12)Put local people first – Make sure that local communities are put first and cash is the right approach.
13)Cash + Technical assistance – There is a need to also provide financial literacy and training if cash transfers are for longer period of time to help avoid exploitation.

It is important to note most of the evidence comes me out of development world and often conditional based programs tied to health or education programs. There is very strong evidence of improved in health and education programs. There is a lot of evidence from government social assistance programs. There has also been huge shift in how the US government does food aid, it isn’t just about transoceanic shipping but local and regional purchases.

One of the largest examples of scale initially was in Pakistan in 2011 where 50,000 people get access to a debit card within 1-2 days. However, one participant in the group was in Pakistan at that time and cautioned that he saw many people who were given ATM cards that didn’t know how to use them He also saw moneylenders and others take advantage of people.

The length of cash transfers varies depends on the context. In humanitarian emergencies it is often short term and could be a one of transfer. However in longer-term crises, such as hunger or displacement, cash transfers could be a longer term process could be a one off, but if during a hunger season needs to be longer.

One of the topics that came up several times is that many people are opposed to the idea of cash transfers for a number of reasons. This can include that people don’t trust others to make their own decisions. Second that there might be waste or fraud. This is also the challenge of letting go of how aid is distributed. A related issue is that often funders and others who want to help in an emergency setting want to send something tangible that can be seen. Organizations and others might be reluctant to send cash as hard to see.

A fun way of framing the key question was raised by Brick, how can we do more cash better?

What are your thoughts/experiences on the role of cash transfers in humanitarian or development programming?

Make sure to also check out the wonderful resources of the Cash Learning Partnership which has a wealth of resources to advance learning and best practices around the world.