Cash: Do We Know Enough?
Cash has become a driving modality for humanitarian action. It is more dignified as it allows people to spend on what they deem most important. It is infinitely easier to track as compared to direct material distribution, e.g. food, winterisation kits, tents. In a protracted crisis, it can also be cheaper although this comes with a lot of caveats. Cash also entails several dynamics that are poorly understood and that could result in a lot of heartache down the road. Maybe we should stop and do the analysis before we rush into this new modality.
Cash gives people greater familial and community-based power as they are able to engage with different people in new ways. Giving the most vulnerable in a community cash, especially in a community that is vulnerable overall, will play into various societal dynamics, raising the ire of local leaders, neighbours, and other family members. We've seen this in the tight community structures in Somalia where each social actor tends to want to take a "piece". People may take on more debt or pay off debt that changes their status. We've seen this in Gaza. Cash may also be seen with jealousy and its recipients with derision by other people in the community who are also vulnerable but who may not qualify for various reasons. We've seen this in Lebanon and Turkey. What else does this imply for this person's or household's status? How will the community dynamics change?
Cash empowers people to also make bad decisions--to buy a big meat based meal once rather than staples for a week, or small gifts or sweets for the kids rather than what might be more necessary. I think I would make such a choice if my kids were stuck away from home, miserable and scared--I'd want to have at least one nice, bright thing for them, at least once. Giving people cash implies that we don't judge such decisions. So, given that we may not want to enable such decision making, we can build in all kinds of controls, having cards or vouchers that can be used in only some shops or for only select items. People will find their way around these controls, of course. They will end up selling the items in markets, as people often already do with direct material support. So, we will develop tighter and tighter controls and soon cash becomes as expensive and as constrained as direct material distribution.
Cash can also become a market mover. In places where there are high percentages of recipients as compared with others, like in Lebanon where nearly 25% of people living there are registered refugees, or in the north of Kenya where long-standing refugee camps have taken on the status of small cities, cash stipends will dictate market prices. In Lebanon, the cash stipend for rent was US$200. Any barely inhabitable space became a rental property priced at US$200. This had an impact on property and rental costs for vulnerable Lebanese living in the same communities. This can give rise to social tensions as well as to throw macro-economic analysis out-of-whack.
So, what's the added value?
We tend to like cash as an aid modality because, like measuring efficiency within a complex operation, cash is traceable. We can, especially with biometric registration and the use of cards, see how, where, and when people spend money. This does give us insight into the precise nature of people's needs during a crisis, especially if it can be compared with other key data sets, like severe acute malnutrition rates, changing coping strategies, access to education, household asset levels, and other key humanitarian metrics.
Cash is also cheaper in a protracted crisis. While some assume it is cheeper period, we did analysis of WFP's voucher programme and showed that the start-up costs associated with cash (technical staff, databases, relationships with commercial banks, etc.) are far more expensive than direct distribution (materials, basic labour). However, over time (we calculated in about 18 months in various contexts) there should be economies of scale and a reduction of start-up labour costs that makes cash much less expensive. This assumes, of course, that the organisation managing the cash programme reduces said staff--something that often does not happen!
We seem to be rushing toward cash without having done the appropriate level of analysis or figuring out what ratios and comparisons must be made to understand all the relevant implications. We seem to be moving to cash in highly diverse contexts with cultural and social dynamics that we understand poorly. We run the risk of rushing to implement this modality only to find out later that the negative dynamics created by cash are worse than the gains made in dignity, cost savings, or traceability.
Haven't we done this before? Haven't we rushed in based on a good idea rather than on evidence only to find a slew of problems in the end?