The case for upending humanitarian aid as we know it (and what I learned along the way)

food distribution

In the last few months, I sat on a blue chip panel debating how to make the humanitarian system work better. The report is out, and recommendation number one could not be more clear:

Give more unconditional cash transfers. The questions should always be asked: ‘why not cash?’ and ‘if not now, when?’.

As readers of the blog will know, I could not agree more. This is groundbreaking stuff for humanitarians. But I can’t bring myself to write another earnest post about cash transfers. You can see others make the case or read the report. It’s very good.

What interests me more are the insights into international aid that came from serving on the panel. A grab bag of impressions:

  • It’s amazing how often the US government came up as an obstacle to doing the right thing. Anti-terror legislation; financial regulation; the fact that giving cash to the poorest wasn’t as much in the interest of US lobbyists, no matter if cash worked or not. I know the US is not the only government with perverse incentives. If France was the biggest player surely we would have long discussed the vagaries of French politics. That said, other developed countries seem to have a more professional, more charitable aid regime. I wonder what it is about the US that its generosity is so self serving?
  • I won’t even get into how low an opinion people seemed to hold of the United Nations. If anyone can figure out how to take $10 to give a refugee $1, they will.
  • Evidence was extremely influential to the discussion, but little of that evidence overlapped with what economists have found persuasive. The recent randomized trials were seldom discussed, even though they point in the same direction–that almost nothing is as effective and cheap as cash. What was important, rather, was that lots of organizations had been experimenting informally with cash here and there for decades. The accumulation of these experiences mattered a great deal. Economists like to say that the plural of anecdote is not data, but that’s clearly not true when it comes to real innovation and organizational change. I don’t think we economists are right on this one.
  • It’s interesting to think that one logical extension of cash transfers to the poor and displaced is some sort of cross-border, universal social safety net. The interesting question is whether this increases or decreases incentives to flee an oppressive country, and what this does to incentives facing the oppressors. This strikes me as a good example of the kinds of international relations dissertations that are not being written.
  • I could not believe that busy, senior people—think CEOs of large non-profits—could attend overseas meetings with a couple of weeks notice. I had work and family commitments that kept me from joining half the discussions. I would’ve thought a CEO had more. But perhaps the nature of the job is fluid, and they have the seniority to reschedule whatever they like to do what they think is important. And maybe few had toddlers. (I prefer to believe these explanations over the equally plausible alternative: they were all consulted about the ideal dates in advance and I was the last to be told.)
  • A reporter asked me: Why now? Why didn’t this happen a decade ago, or two? I don’t have a good answer. Part of it could be the slow accumulation of evidence. Maybe the randomized trials pushed people over the edge. Maybe it’s technology like ATM cards and mobile money. Maybe crises like that in Syria are so big and so poorly suited to handing out food instead of cash, the world is being forced to think hard about cash for the first time. I think it has most to do with the aid world finally feeling accountable not just for measurable impact, but at a reasonable cost.

I am curious if people have other answers to some of these questions.

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  10. Dear Chris, thank you for this fascinating blog. I agree with everything you say. Could you please clarify the figure about the UN?: “If anyone can figure out how to take $10 to give a refugee $1, they will.” Thank you very much.

  11. If you want to understand the view of the US on cash transfers abroad just look at the US social safety net – fragmented and complicated. Plus there is a bit of belief in the US that the poor (at least in the US) are poor because of bad decisions they have made in life, so why trust them with cash?

  12. To your second-last point, about busy people finding time for overseas meetings – you hint at what I think might be the most powerful explanation: they are senior enough to allocate both flexibility and a cushy travel budget (if it applied here, but still relevant) to themselves. This is a part of NGO and intl dev culture that is not skewered enough, I fear.

  13. “A reporter asked me: Why now?”

    It’s interesting evidence for the rule of thumb that system change takes 10 years. Cash distribution in the humanitarian sector really took hold after the Indian Ocean tsunami, when a surplus of funding made it both possible and desirable to experiment with cash. 10 years later, here we are…

  14. Fascinating work. I remember people talking about the possibility of giving the impoverished cash as far back as the mid-1970s. But I would like to second Fifer’s question. I’m having trouble imagining how giving cash would have worked in for eg then-Zaire in the mid 1990s, when the interahamwe and genocidaires effectively preyed on the refugee population.

  15. If official aid would work with enough transparency & accountability, we could see cash transfer as just another form of contribution, complementary to the first one, now, evident failures and mismanagement, in addition to a devastating financial global crisis, push for new forms of aid more effective and less bureaucratic.
    The key is the harmonization of both donations and to assure is getting into the hands of the beneficiaries effectively, which represents a truly challenge in countries with high levels of corruption.That is so, that we need to assure that minimum standards of health,education,etc are covered first, Please see more of my position in my article: “Charity & aid system…we think too much” http://bit.ly/1gqXGht

  16. How do you prevent cash payments from being taken by leaders, authorities, or thugs, especially from women? This problem is very bad in refugee camps.

  17. I’m a humanitarian cash transfer person and here’s something I have to get over: that it’s called ground breaking.

    COME ON—we’ve been doing this FOREVER.

    I love point number 3—on evidence. So true and pretty mind boggling that it’s a different way of accumulating ‘evidence’. I learned early on to get an arsenal of case studies (anecdotal stuff written up pretty) to take to any agency thinking about cash as their senior mgmt was going to need it and this is what convinces them. We are starting to talk about real evidence though (and data) so that’s a positive.

    The question of why now—I do think Syria is a big part of it. Like pretty big part of it. I also think all the banging drums around it (this high level panel, calling it revolutionary to humanitarian work and agenda point on WHS), as annoying as it all is—it’s creating momentum that we’ve needed. Calling cash innovative will not stop me from rolling my eyes but if it gets people to pay attention and to support the use, I’m all for it.

  18. I’ve often wondered how influential the micro-credit boom of the 90s was for the international community, and for donor organisations. Influential in terms of changing the mindset from an assumption that poor people would waste cash money, to one where it’s assumed that they are the best people to determine how to use it! The tide of support for microcredit that is only now receding (probably having reached a peak in 2005, ‘international year of microcredit’) might have paved the way for a much greater use of cash programming from the early 2000’s….that might be reaching critical mass just now?

  19. “Humanitarian aid” here = response to humanitarian crises, not foreign aid more generally, right? I don’t think that’s going to be clear to most of your readers from this post (it wasn’t to me until I looked at the report).