Editorial: mini special issue on cash transfers

Abstract

This editorial provides a basic introduction to the role of cash transfers in emergencies— the focus of this mini special issue of Disasters—drawing on ongoing research at the London-based Overseas Development Institute (ODI) (Harvey, 2005). This mini special issue is unique in that it is being published in conjunction with a special issue of Development Policy Review that concentrates on the role of cash transfers in longer-term development. The papers in both journals highlight the growing interest in cash transfers as an instrument of relief and as part of longer-term social protection and safety net strategies and the linkages between them. Most relief has traditionally been in-kind and taken the form of food aid, shelter materials, seeds and other items, such as blankets or buckets. This does not have to be the case; whenever in-kind assistance is provided, people could, in theory, be given cash, enabling them to decide what they most need themselves and to buy it in local markets. Proponents of cash-based approaches in emergency relief argue that they can be more cost-effective and timely, give recipients greater choice and dignity, and have beneficial knock-on effects on local economic activity. Sceptics contend that they are often impractical because they incur additional risks of insecurity and corruption, and maintain that cash may be more difficult to target than commodities. Even where cashbased approaches are feasible, there are concerns about the exclusion of women, that recipients may misuse cash and that it may have negative effects on local economies and could fuel conflicts. A review of the literature on cash-based responses in emergencies produced two main findings (Harvey, 2005). The first is that cash and voucher approaches remain largely underutilised in the humanitarian sector, which still mostly provides people with food, seeds, plastic sheeting and water containers, rather than giving them the money to buy these items themselves. The second finding, however, is that there is an increasing amount of experience of cash and voucher approaches, and that the dominance of commodity-based approaches is perhaps starting to erode. Cash for work (CFW) remains the most common type of cash-based emergency response. There is also a developing body of experience of cash grants, with Bam, Iran, Pakistan and Somalia, as well as the response to the December 2004 tsunami, serving as recent cases in point. Vouchers are increasingly being employed as an alternative to seeds. In the West, of course, cash has long been used for long-term welfare payments and in response to emergencies, both through the insurance system and as part of relief action. Nor, indeed, are cash-based responses especially new. In Hunger and Public Action, Dreze and Sen (1989) show that they have a long history in China and India, and were an important feature of famine response in the 1980s in Botswana, Cape Verde and Ethiopia.