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When it comes to refugee relief, cash might be better

Syrian refugees stood on mud near their makeshift tents after heavy rain in Halba, northern Lebanon.REUTERS

Welfare programs that hand out cash are always controversial, with critics worrying about everything from recipients spending money on drugs or alcohol, to fears that corrupt administrators will siphon off resources. This is true for domestic welfare programs, and it might apply even more to relief for refugees, where the idea of dropping pallets of foods seems much more controlled than distributing dollar bills.

Yet, a new study from an aid agency finds that when it comes to helping refugees, direct cash transfers might be the best way to go. The organization International Rescue Committee has been providing help to some of the estimated 2.9 million Syrians who’ve fled into nearby countries to escape their own civil war. More than 1 million have settled in Lebanon alone, and that’s where IRC recently carried out an interesting experiment.

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From November 2013 to April 2014, IRC split 87,700 Syrian refugees living in the mountains of Lebanon into two groups: Those living in villages or settlements above 500 meters received a food voucher, plus an ATM card that was refilled with $107 per month; those living below 500 meters received only a food voucher. The cash was meant to allow refugees living at higher elevations to purchase warm clothing and heaters for the winter. It also provided researchers with the chance to compare the two groups and analyze how infusions of cash change refugee life.

One of the main things they found was that the refugees with ATM cards didn’t actually spend much of the money on blankets and clothing — instead they applied it to more basic needs like food and water, which allowed them to eat more meals and larger portion sizes. The researchers also observed that the cash allowances had positive social effects, like allowing more families to send their children to school instead of off to work, and stimulated local village economies. At the same time, they found little evidence of the negative consequences associated with cash welfare: The money didn’t boost consumption of “vice” goods, it didn’t spur inflation, and there were no signs of corruption.

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All in all, the IRC report presents a very rosy view of a very complicated practice. As Ideas reported in a 2007 article, “A handout, not a hand up,” researchers and relief agencies have been engaged in spirited disagreements for years about the best way to help poor people around the world. This report won’t end that, but it does suggest a certain simplicity to the sometimes overwhelming problem of refugee relief. What do people with no money need most? Money.

Related:

Jeff Jacoby: Comfort those who wander


Kevin Hartnett is a writer in South Carolina. He can be reached at kshartnett18@gmail.com.