September 29, 2014 —  In the first-ever scientifically rigorous evaluation of emergency cash distribution for refugees, "Emergency Economies: The Impact of Cash Assistance in Lebanon," the International Rescue Committee today unveiled striking findings based on research in partnership with Daniel Masterson of Yale University and Christian Lehmann of the University of Brasilia, focused on Syrian refugees in Lebanon.

Last winter, 90,000 Syrian refugee families facing freezing conditions in the Lebanese mountains were given $100 a month through ATM cards by international aid agencies. Families living below 500 meters altitude were given e-vouchers for food, while those living in villages above 500 meters were also given e-vouchers for food, plus the cash to buy winter warmth materials, like blankets and sweaters.

Comparative research confirmed that refugees receiving the cash spent everything on meeting very basic needs ahead of winter. Despite the cash initially being intended by aid agencies for use buying materials to keep warm, the money allowed the refugees to invest in what they knew they most needed: food and water.  There was no evidence of spending on alcohol or tobacco.  Meals were more frequent and had bigger portions.  And for each dollar of cash assistance spent, the model calculated $2.13 was created in local markets, boosting the Lebanese economy. The research did not find an inflationary impact — instead, supply moved to meet new demand.

As well as economic impact, social impacts were also measured. Households receiving cash assistance were half as likely to send their children out to work. Cash also increased access to education, and there is evidence of reduced tensions within the household and between the refugee and host community.

A majority (80%) suggested that they would prefer to receive cash to other forms of assistance.

David Miliband, IRC president and CEO, said:

“The spate of man-made and natural disasters enveloping innocent civilians raises profound questions not just for international politics, but for NGOs and the humanitarian sector, as well. If we keep doing ‘business as usual,’ the gap between need and provision will continue to grow. Cash distribution – alongside clear humanitarian ‘floor’ targets in the revised Millennium Development Goals, more sustainable local partnerships and better use of evidence overall -- could be part of a vital renewal of the humanitarian sector. There will be a new disaster in the near future. And when the calls for donations go out, yes, let’s spend some of it on cash, but let’s also spend that fraction more evaluating it – the lessons are too expensive to miss.”

Radha Rajkotia, senior director of economic programs, said:

“This research does suggest that there is an additional opportunity to deliver better outcomes for people hit by emergencies, and provides a striking rejoinder to those who would dismiss the humanitarian sector as ineffective. This does not mean there is a new humanitarian silver bullet in the fight against human suffering.  While cash helps people’s situations, $100 a month does not remedy the trauma and loss of being driven from your own country. There is also still work to be done about the circumstances in which cash distribution works best, how to reach people at speed and how to ensure that the costs of bureaucracy are kept down.”

Read the full report here.