Thinking Aloud: “Emergency Economies: The Impact of Cash Assistance in Lebanon”

Oct. 23,  2014 by Darius 

Getting aid to refugees has always been a thorny problem.  There’s been an easy solution floating around for some time, though: just give refugees cash.  Last month, the International Rescue Committee released its report on the first thorough study of giving cash to refugees based on its work in Lebanon.  The IRC program gave an ATM card worth $575 to approximately 85,000 refugees in Lebanon (which has the highest ratio of refugees to population of any country in the world).  I’ve summarized a few of the report’s important findings below.

  • Cash assistance was a big hit with the refugees themselves: more than 80% of refugees in the program preferred cash assistance to other forms of donation, such as in-kind assistance.
  • The study did not find that cash assistance comes with the drawbacks associated with it. There was no evidence that cash assistance increased corruption or was spent inappropriately.  Instead, a majority of cash received as assistance was spent on food and water.
  • Cash assistance (at least in this study) was too small in scale to make a difference in local prices. It also did not contribute to local inflation.  There was also no evidence that cash assistance was a significant “pull factor” enticing other refugees to come to the area.
  • Cash assistance was good for the local economy: every dollar in cash assistance to refugees produced $2.13 in GDP for the Lebanese economy.
  • Cash assistance reduced child labor and increased access to schools. It also promoted community cooperation and decreased tensions within refugee households.  Finally, cash assistance to refugees did not reduce the labor supply, meaning it did not cause refugees who received it to stop looking for work.

Cash assistance has one last great benefit: it is incredibly cheap to actually get into the hands of refugees.  Yet it currently accounts for only 3% of UN aid in Lebanon (Source: “Cash Aid for Refugees Succeeds Despite Donors’ Doubts,” Reuters, October 23, 2014,  Hopefully that will increase in the future.

You can read the full International Rescue Committee report at

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