Cost-Effectiveness in Humanitarian Work: Cash-Based Programming
The evidence presented in this review demonstrates that cash based responses are VFM for improving outcomes and reducing the cost of the response
Abstract
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).
K4D helpdesk reports provide summaries of current research, evidence and lessons learned. This report was commissioned by the UK Department for International Development.
Citation
Mikulak, M. (2018). Cost-effectiveness in humanitarian work: cash-based programming. K4D Helpdesk. Brighton, UK: Institute of Development Studies
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