Is cash better than food vouchers for Syrian refugees?

My first trip to Jordan will always stay with me. During my visit I met a refugee family in their temporary home in Amman. The household was made up of a mother and four kids aged between three and seven. Their neighbours - a Syrian woman and her child - joined us. Neither of the women knew the whereabouts of their husbands or whether they were still alive.

Their homes, which were in a part of the city that had served as a Palestinian refugee camp years ago, consisted of just two rooms with no heating except for a two-flame electric stove. Other than a small fridge and some basic household crockery, there was no furniture except for a makeshift table supporting the stove.

Their situation - through no fault of their own - was desperate (and was poised to get even worse, as my visit occurred at the onset of winter). It also made clear to me that they needed immediate and sustained help. From food to winter clothes, medicine to better accommodation, the sheer scale of the crisis was instantly apparent.

The visit was also a vivid reminder that not every refugee ends up in a camp. Many more are assimilated into host communities - not surprising given that of Syria's prewar population of 22 million, 5 million are now refugees and between 6 and 7 million have been internally displaced. With needs outpacing resources, humanitarian aid agencies and donors have had to become even more effective and make funds work even harder.

Studying hard

The United Nations World Food Programme (WFP) is one of the most active of all the humanitarian organisations in the region, providing emergency food assistance to approximately 4 million people within Syria and 1.5 million Syrian refugees in neighbouring countries. This response is a testament to the effectiveness and power of the WFP, but there are always ways to improve the impact of a programme. With this in mind, the WFP commissioned us to explore what was more effective in achieving food security for refugees: electronic food vouchers or unrestricted cash. So, how did we go about our study?

First, we randomly selected approximately 3,100 households of Syrian WFP beneficiaries in Jordan and Lebanon (which together accounted for approximately 75% of WFP's 2016 food voucher programmes in the region) and was limited to families living in host communities. Then we assigned each household to one of three groups, according to their means of accessing the WFP food assistance.

All three groups were given an electronic card, but their use of the card was different. The first group were able to use the card as electronic food vouchers at WFP-affiliated stores; the second group could withdraw unrestricted cash from ATMs; and the third had the choice of using the food vouchers or cash from ATMs or a combination of the two.

The study - which took place between February and November last year - looked at the impact of the different assistance types across multiple dimensions. These included impact on food security and daily life, changes in food expenditures, beneficiaries' preferences, and overall satisfaction. The results were clear. Those who received unrestricted cash had similar or better food security than those who received electronic vouchers. And cash did not cause harm to family dynamics or any of the other potential negative consequences that critics often raise.

Moving forward

Let's be clear at the outset: cash-based assistance is not appropriate for every country, and delivery styles must be specific to the local context in order to be effective. Jordan and Lebanon, for example, are both middle-income countries with functioning and accessible markets - not unlike Syria before the civil war. Cash-based assistance can work well with people who are accustomed to life in a cash system, but it may be less effective in a developing nation with a limited market economy.

That said, there are some clear reasons why cash assistance came out on top. Firstly, it delivered superior or equivalent food security when compared to food-restricted vouchers. Because recipients withdrew money from ATMs, the cash recipients could shop at all vendors not just at WFP-affiliated stores. Cash enabled this group to shop when and where they chose, identify the best promotions, and buy at the lowest prices, resulting in more food for the same amount of money. And beneficiaries also shopped for food more frequently, which boosted their access to fresh produce and perishables. Under the voucher programme, people tended to purchase in bulk once or twice a month, which naturally led to higher consumption of dry and canned goods. Interestingly, the cash advantage on food consumption was most pronounced in situations where refugees faced lower food security overall.

We also found that cash does no harm - despite fears that greater access to it might lead to risks such as theft, increased debt or household disagreements. With this in mind, it should come as little surprise that when given the choice to access WFP assistance either through the ATM or through food vouchers at supermarkets, more than 75% of households in the third group chose cash. Cash provided not only better flexibility but also a sense of dignity and empowerment - particularly necessary for vulnerable people far from home and stripped of previous livelihoods and funds. In short, it made them feel normal again.

Now that's quite an impact - and one which hints at potentially better times to come.

Read our longer article, Is cash better than food vouchers for Syrian refugees? on BCG.com

FURTHER READING

• Righting the wrongs of the refugee system. Professor Alexander Betts of Oxford University's Refugee Studies Centre tells us about how policymakers can reform the global refugee system to better support those in need
• UN's Olivier Delarue on addressing the global refugee crisis. With more forcibly displaced people seeking refuge and safety than for decades, the role of the United Nations High Commissioner for Refugees has never been more important. But while the task is daunting, the organisation is accelerating its efforts to identify new, innovative solutions to complex refugee challenges. Olivier Delarue, who co-leads a new unit that facilitates these efforts, tells us about their progress so far
• Jobs for refugees: why it's time for a new approach in Australia. Australia's record of assimilating refugees into society has long been admired, says Larry Kamener. But more needs to be done to help them find work fast

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