STRATEGIC NOTE Cash Transfers in Humanitarian Contexts Strategic Note Cash Transfers in Humanitarian Contexts Final draft prepared for the Principals of the Inter-Agency Standing Committee The World Bank Group June 2016 © 2016 International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org The findings, interpretations, and conclusions expressed here do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowl- edge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. Photos: iStock.com/EdStock (cover); iStock.com/Guenter Guni (p. iv); iStock.com/Joel Carillet (p. viii) Cover design/layout and editing: Nita Congress Contents Acknowledgments v Executive summary vii Abbreviations xi 1. Background 1 2. Overarching issues 2 3. Context 3 4. Areas for enhancement 6 Notes 21 Appendixes 23 A. Evidence paper 25 B. Terms of reference 57 C. Minutes of IASC–World Bank meeting 59 D. Staff and agencies consulted 61 E. Compilation of interview responses 62 F. Workshop outputs 73 G. Documents consulted 82 iii Acknowledgments his note was produced under the strategic leadership of Colin Bruce, Senior Adviser in the Office of the President, and spearheaded by Jehan Arulpragasam, Practice Manager, Social Protection T and Labor Global Practice (GSPDR). The core team included Ugo Gentilini, Senior Social Protection Specialist, GSPDR; Stephen Anderson, Independent Consultant, FEG; Matthew Hobson, Senior Social Pro- tection Specialist, GSPDR; and Andrew James Roberts, Senior Operations Officer, Social, Urban, Rural and Resilience Global Practice (GSURR). The team wishes to express its gratitude to all Inter-Agency Standing Committee (IASC) members of the Cash Strategic Task Group as well as officials from country Cash Working Groups for their insightful, con- structive, and supportive approach throughout the consultation and drafting process. Special thanks go to members of the “Engine Room”—staff appointed by each of the IASC principals to engage on technical aspects in the production of the note, including phone interviews and a one-day workshop held March 21 in Washington, D.C. Special thanks also to the IASC Secretariat and, in particular, Astrid Van Genderen Stort for facilitating the early stages of the process. Non-IASC experts also provided invaluable advice via phone interviews, including representatives from the U.K. Department for International Development, the European Commission Humanitarian Aid Office, the Overseas Development Institute, and the United States Agency for International Development. A full list of people interviewed is provided in appendix D. The drafting process was also informed by technical advice from an internal working group, including Julie Dana (Lead Financial Officer, GFM3A), Caroline Bahnson (Senior Operations Officer, GCFDR), Sima W. Kanaan (Lead Social Development Specialist, GSURR), Benedicte Leroy De La Briere (Lead Economist, GCGDR), and Holger Kray (Lead Agriculture Economist, GFA13). Finally, the Evidence Paper (appendix A) benefited enormously from discussions with Berk Ozler, David McKenzie, David Evans, Emanuela Galasso, Ruslan Yemtsov, Omar Arias, John Hoddinott, Harold Alderman, Leslie Elder, Aline Coudouel, and Jumana Qamruddin. v Executive summary pon request of the Inter-Agency Standing Committee (IASC) Principals, the World Bank Group agreed to lead a process of reviewing key issues and options for significantly scaling up the use U of cash transfers in the humanitarian space. The IASC agencies have introduced an impressive number of innovations around this modality, but at present, they still account for no more than 6 percent of humanitarian assistance. The IASC agencies should now chart the way forward to significantly scale up use driven by the available evidence. They should also work toward filling evidence gaps on priority issues, such as the potential of cash to stimulate job creation. Such a scale-up would be very timely as major trends in policy, technology, concentration of people in urban settings, and market integration are creating a condu- cive environment for the wider use of cash transfers to meet humanitarian needs. More countries are also developing national social protection systems in which cash is a significant com- ponent. The global spread of conditional cash transfers soared from 27 countries in 2008 to 64 in 2014. Between 2010 and 2013, the number of African countries with unconditional cash transfers doubled to 40 nations. Cash can help facilitate linkages between humanitarian and development approaches. In-kind assistance will continue to be a strategically important component of humanitarian assistance in the years to come, though ongoing discussions on humanitarian reform are demanding robust evidence of its effec- tiveness and efficiency in achieving agreed outcomes. Cash sheds light on the strengths and challenges of the current humanitarian system and can be a com- pelling entry point for systemic change. Multipurpose cash in particular can challenge traditional sectoral responses. To capitalize on this, the composition of humanitarian assistance must be rebalanced to reflect the rapidly evolving context with clear links to the Grand Bargain and the Secretary-General’s ongoing structural reform agenda. Three clusters of priority action areas have been identified to structure the IASC Principals’ engagement: (1) foundational areas (i.e., clarifying core concepts and principles including how to consider cash), (2) opera- tional issues (i.e., transfer selection, needs analysis, delivering with common approaches, and preparedness), and (3) structural elements (i.e., pursuing a multistakeholder agenda with strong governance and responsive coordination, and ensuring actors build upon and strengthen existing systems). These are detailed below. vii Foundational issues ■ Concepts and definitions. The IASC Principals should develop consensus on shared terminol- ogy and definitions building on work initiated by actors such as actors such as the World Food Programme, the United Nations High Commissioner for Refugees, the Cash Learning Partnership, the U.K. Department for International Development, and the European Commission Humanitarian Aid Office. ■ Systematic equity in consideration. The IASC should agree to equally and consistently con- sider cash alongside other forms of humanitarian assistance. Operational issues ■ Assessments. Needs assessment should be multisectoral, with clear links between needs assessments, response analysis, and the response plan. Assessments should also include the analysis of markets around a range of humanitarian objectives and across sectors. The IASC should ensure that assessment and monitoring data sets, analytical methods, and findings are readily available to the broader humanitarian and development communities through a common accessible repository. The IASC should test whether and under what circumstances a separation of responsibility for assessments and implementation could result in a more accountable division of responsibilities and activities. ■ Drivers of transfer selection. Cash transfers hold the potential to provide beneficiaries with choice, strengthen local markets, engage the private sector (e.g., banking and financial services), and empower people and communities. The IASC should ensure that the most appropriate trans- fer modality, including combinations thereof, are context- and sector-specific and emerge from careful response analyses. Issues to consider include program objectives, the level of market functionality, predicted cost-effectiveness, implementation capacity and financial infrastructure, the ability to manage risks such as those around protection and gender, beneficiaries’ prefer- ences, and pragmatic considerations on resource availability. ■ Common programming approaches. A priority reform area should be to reduce the current fragmentation in approaches throughout the programming cycle by moving to common systems that work for all parties. Where program design does not have the benefit of building on common approaches, IASC programs should help develop them and support linkages to government sys- tems when possible. ■ Leveraging and improving existing national systems. There is extensive scope for build- ing upon and improving existing national systems as central to humanitarian action. In general, humanitarian actors should demonstrate the rationale for not using existing national systems to viii Strategic Note: Cash Transfers in Humanitarian Contexts provide assistance. To this end, the IASC should develop a checklist of issues to consider in decid- ing whether and to what extent government structures can be leveraged