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March 2016

Just give them the money: Why are cash transfers only 6% of humanitarian aid?

Duncan Green's picture

Paul Harvey, ODIGuest post from ODI’s Paul Harvey

Giving people cash in emergencies makes sense and more of it is starting to happen.  A recent high level panel report found that cash should radically disrupt the humanitarian system and that it’s use should grow dramatically from the current guesstimate of 6% of humanitarian spend.  And the Secretary General’s report for the World Humanitarian Summit calls for using ‘cash-based programming as the preferred and default method of support’.

European Commission’s Humanitarian aid and Civil Protection department (ECHO) finances basic services for 100,000 Eritrean refugees in EthiopiaBut 6% is much less than it should be. Given the strong case for cash transfers, what’s the hold-up in getting to 30%, 50% or even 70%? The hold-up isn’t the strength of the evidence, which is increasingly clear and compelling. Cash transfers are among the most rigorously evaluated and researched humanitarian tools of the last decade. In most contexts, humanitarian cash transfers can be provided to people safely, efficiently and accountably. People spend cash sensibly: they are not likely to spend it anti-socially (for example, on alcohol) and cash is no more prone to diversion than in-kind assistance. Local markets from Somalia to the Philippines have responded to cash injections without causing inflation (a concern often raised by cash transfer sceptics). Cash supports livelihoods by enabling investment and builds markets through increasing demand for goods and services. And with the growth of digital payments systems, cash can be delivered in increasingly affordable, secure and transparent ways.

People usually prefer receiving cash because it gives them greater choice and control over how best to meet their own needs, and a greater sense of dignity. And if people receive in-kind aid that doesn’t reflect their priorities they often have to sell it to buy what they really need as, for example, 70% of Syrian refugees in Iraq have done. The difference in what they can sell food or other goods for and what it costs to provide is a pure waste of limited resources. Unsurprisingly people are better than aid agencies at deciding what they most need.

Does formal work pay?

Michael Weber's picture
The disincentives to accepting a formal job often outweigh the incentives. Our research shows a positive correlation between measures of disincentives for formal work and the incidence of being informal. The formalization tax rate and the marginal effective tax rate are useful measures. The higher these measures are, the more likely workers - especially low-wage workers - will be informal. Policymakers need measures that help them understand the disincentives associated with formal work if they are to design policies that encourage formalization.
 

How capacity building and market analysis achieved speedy implementation in China

Jianjun Guo's picture
Photo credit: Jianjun Guo

Is it possible to complete advanced contracting for the construction of Bus Rapid Transit (BRT) lines within two or three months and have the lines in operation within six months?

The simple answer is, yes.

The China Urumqi Urban Transport Project II, a US$537 million project, achieved just this as it looked to improve mobility in selected transport corridors in the city of Urumqi, the capital of the Xinjiang Province in West China.

Weekly wire: The global forum

Roxanne Bauer's picture
World of NewsThese are some of the views and reports relevant to our readers that caught our attention this week.
 

Do international NGOs still have the right to exist?
The Guardian
It’s highly unlikely that corporate bosses regularly ask themselves if their businesses have a right to exist. Their goal is to sell stuff and make a profit. But if your goal is to alleviate poverty and human suffering – in the face of statistics showing mixed outcomes – is this, in fact, the most important question an International NGO can ask of themselves? At the BOND conference last week, in a session entitled How can INGOs survive the future, Penny Lawrence, the deputy CEO of Oxfam stated bluntly: “we need to earn the right to survive the future.” It is like the sector’s very own Damascene moment.

Changing views of how to change the world
Brookings, Future Development blog
World leaders concluded three large agreements last year. Each represents a vision of how to change the world. The Addis Ababa Action Agenda on financing for development agreed to move from “billions to trillions” of cross-border flows to developing countries. The agreement on universal sustainable development goals (SDGs) sets out priorities (albeit a long list) for what needs to change. The Paris Agreement on climate change endorses a shift to low-carbon (and ultimately zero carbon) economic growth trajectories. There is a common thread to these agreements. They each reflect a new theory of how to change the world that is not made explicit but has evolved as a matter of practice. Understanding this new theory is crucial to successful implementation strategies of the three agreements.
 

Building capacity for public-private partnerships

Mathieu Verougstraete's picture

Public sector resources alone cannot fulfill the development objectives of many countries. Yet the capacity of private sector in the development dynamics of countries remains hugely untapped. This is felt most acutely in the delivery of infrastructure projects.

Across emerging markets, much needed economic growth is hampered by a shortage of roads, mass rapid transit systems, telecommunications, power plants, sanitation, medical facilities, and other basic infrastructure, all of which are much needed to achieve sustainable development. However, funding the multitude of projects required in emerging markets is a huge challenge for governments that face budgetary constraints and limited borrowing capacity.

These conditions are encouraging governments to consider private investment as a promising option to circumvent their resource constraints and improve the delivery of public services – in particular, through public-private partnerships (PPPs). At the same time, many governments are also discovering that forging such partnerships is fraught with a number of difficulties.

What can societies do to age with growth and prosperity?

Hans Lofgren's picture
Identifying and making policies that effectively counter the drag of aging on global growth is imperative for the long haul. During the last 15 years, close to 80 percent of global growth took place in middle- and high-income countries that, during the next few decades, will undergo rapid aging, with shrinking population shares in working age and growing shares of elderly.

Addressing the education emergency in Lebanon

Noah Yarrow's picture
Mohamed Azakir l World Bank

The education system in Syria is a victim of the country’s conflict; Syrian teachers and students have been displaced, along with their families, and many Syrian refugee children have now been out of school for multiple years. Of the approximately 340,000 Syrians ages 6 to 17 who are registered with the United Nations High Commission for Refugees (UNHCR) in Lebanon, about 45% are in Lebanese public schools, with additional numbers in private, semi-private and non-formal instruction. 

2014: Toward more efficient financing for healthcare, agriculture, and Ulaanbaatar city

Jim Anderson's picture
Continuing our series on the 25 years since Mongolia joined the World Bank, today we look at 2014. Growth was 7.8 percent, but inflation was in double-digits and FDI continued to fall. The World Bank’s economic updates continued to warn of persistent macroeconomic imbalances, and sector studies focused on financing.

The rapid growth rates of the previous years, combined with the bent for decentralization, led to a natural desire to explore new possibilities for subnational finance. To this end, a pair of studies in 2014 aimed at preparing a debt management approach for Ulaanbaatar and a financial self-assessment for the city. The former stressed “the need to first build local institutional capacity for an effective and transparent debt management system before any borrowing is considered. … UB should use this time to put in place a debt management system so that it is prepared for borrowing once it is ready and the macroeconomic conditions improve.” The latter study examined what it would take for Ulaanbaatar to improve its credit quality and thereby prepare for an official rating from a credit rating agency. The recommendations centered on improving the city’s financial reporting system, strengthening its capital investment planning process, improving its capital asset registry, strengthening the oversight of municipal-owned enterprises and their debts, and identifying Ulaanbaatar’s contingent liabilities, both explicit and implicit.

A new platform to put cities at the core of sustainable development

Ede Ijjasz-Vasquez's picture
Urban areas will play a critical role in achieving sustainable development and combating climate change. Many cities have already taken bold steps to reduce their environmental footprint, and have often been able to do so much more quickly and pro-actively than their national governments.
 
Based on the premise that greener cities are the key to a more sustainable future, the World Bank and the Global Environment Facility launched the new Global Platform for Sustainable Cities (GPSC) earlier this month in Singapore. The new platform will help mobilize funding for urban sustainability programs, while also facilitating knowledge exchange between cities.
 
Thanks to this innovative approach that closely connects finance to knowledge, the GPSC will be uniquely positioned to make cities the driving force of sustainable development.

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