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Cost-Effectiveness in Humanitarian Work: Cash-Based Programming

2018 — By Magdalena Mikulak

There is consensus in the literature that giving people cash in humanitarian contexts provides greater choice and dignity while at the same time stimulating local markets. In comparison to in-kind approaches, cash emerges as more efficient to deliver and – depending on the particularities of a given context – it can also be equally or at times more effective at delivering the desired outcomes when compared to in-kind assistance and vouchers. The evidence presented in this literature review demonstrates that cash based responses are value for money with respect to improving humanitarian outcomes and reducing the cost of the response. In particular, unconditional cash transfers allow people to buy the goods and services they need through local markets and are also characterised by flexibility that would be hard to match through in-kind responses (ECHO, 2016). Cash based responses also produce gains for local economies and the effectiveness of cash and in-kind transfers are generally considered to be similar. While the effectiveness of cash and in-kind is similar, the efficiency is generally in favour of cash (WB, 2016). Cost efficiency of CBR is improved in particular once programmes are at scale (WB, 2016) although the operating context can significantly influence cost efficiency. Overall, efficiency values for CBR were lowest in complex emergencies, followed by slow onset natural disasters (e.g. drought), then rapid onset natural disasters (e.g. other extreme weather events, earthquakes) and highest in refugee responses (WB, 2016). Technological advances also drive the cost efficiency of CBR. Some evidence shows that there are few differences in impacts based on the number of instalments used to deliver a programme (UNICEF, 2017). The evidence reviewed also points to the limits of CBR; cash interventions are unable to tackle systemic issues around quality of service provision, education and largely also health (albeit they can help cover costs of dealing with small ailments, or channel some resources into the WASH sector (ODI, 2017; UNCHR, 2018b). CBR cannot address legal and policy issues that often constrain livelihoods or access to services, particularly for refugees, such as the right to work or access to national health and education systems, CBR are also not a substitute for technical skills and support (UNCHR, 2018b).