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By Eeshani Kandpal and Teresa Molina
Safety nets play an important role in humanitarian crises. For instance, the demonstrated success of cash transfers in refugee communities reveal the benefits of building safety nets for targeted use in humanitarian settings. After all, refugees are typically in great need of cash aid and are often concentrated in camps, thus easy to disburse the aid to. Rolling out aid in the face of a natural disaster, humanitarian crisis, or a global pandemic is challenging because governments need to both identify the vulnerable and get aid out quickly.
Recent CGD blogs have argued for anticipatory aid—“cash before calamity” as one blog called it. But it is not always logistically or politically feasible to roll out disaster aid preemptively. It can be hard to predict when and where disaster will hit, and scarce public funds likely have many competing uses, sometimes making it challenging to justify anticipatory aid. Indeed, investments in safety nets even run into questions of cost-benefit and whether cash aid is really the best value-for-money.
However, we argue that the broader use of safety nets—not just in response to or anticipating a crisis, like in the examples above—can help mitigate the impacts of crises. Specifically, pre-existing safety nets have the potential to offset the effects of natural disasters and pandemics by serving as a tested conduit for rolling out aid in a reliable and speedy manner. In the aftermath of a disaster, getting aid out quickly can be critical to the success of recovery efforts. Using existing safety net infrastructure can minimize delays in disbursements and significantly reduce the economic toll on affected households. We use evidence from two crises, a natural disaster and the Covid pandemic, and two settings, India and the Philippines, to make this case.
The first example is a study on the effects of a destructive cyclone in Odisha, India. It studies the effects of a government-implemented, at-scale rural livelihoods program, rolled out between 2008 and 2011, in mitigating the devastating impacts of cyclone that occurred in the Bay of Bengal region of India in October 2013, two years after the livelihoods programs had reached scale in that region. Using variation in intensity of exposure to the storm and the staggered rollout of the rural livelihoods intervention, household surveys show that the storm led to significant reductions in overall household expenditure.
However, enrollment in the livelihoods program significantly mitigated reductions in household non-food expenditure and in women’s consumption. Not only were the overall damages lower, but they also lasted for a shorter duration if the household was in the livelihoods intervention. Notably, reductions in food expenditure were not mitigated, perhaps suggesting a role for complementary in-kind aid. These results indicate that the government of Odisha leveraged its existing safety net architecture to minimize delays in aid disbursement.
The second is an example from the Philippines. In the early months of the COVID-19 pandemic, the government rolled out a generous emergency cash transfer program, aiming to target about 70 percent of the population. This included, but was not limited to, households who were already participating in a national conditional cash transfer program. The country’s primary social protection program, this CCT program, provides cash transfers to low-income households that fulfill a set of health and education-related requirements, like getting their children vaccinated and sending them to school.
One recent study, using household survey data collected before and during the pandemic, estimates changes in depression rates for two groups of households: existing beneficiaries of the CCT program and non-beneficiaries of similar socioeconomic status. Rates of severe depression increased substantially for both groups between December 2019 and July 2020, but the increase was 30 percent smaller for the existing CCT beneficiaries, even though both groups had received the emergency transfers by July 2020. One important reason for this was the quicker distribution of emergency cash to existing CCT beneficiaries, who also experienced smaller increases in food insecurity as a result. These results underscore the potential for a well-functioning social protection program to yield mental health benefits during crises, even when embedded within a broader emergency response effort.
As this evidence highlights, there are strong efficiency and cost-effectiveness arguments for using existing safety net systems to roll out emergency aid. In both studies, we find that safety nets both shortened and dampened the impacts of the crisis. But there’s also an important equity argument for this approach. Women’s consumption and even overall wellbeing are often the hardest hit. This is consistent, for instance, with women having the poorest health and nutrition outcomes within households.
Indeed, the study on the cyclone in Odisha provides empirical evidence of the oft-repeated claim that women are among the most vulnerable to the effects of climate change: using an assignable goods approach, it showed that women’s consumption took the greatest hit after the cyclone. Further, safety nets often target women because they tend to be among the most cash constrained individuals within households. So, by using pre-existing safety net systems to roll out crisis aid, not only can governments use available resources in an efficient manner, they’re also likely to do so in an equitable way.
This evidence emphasizes the importance of investments in the safety net architecture. It is already well-established that safety nets yield large benefits during “normal” times–by helping the most vulnerable, reducing inequality, and even generating long-run improvements for children covered early in life. But an under-appreciated benefit of a robust safety net system is its ability to mitigate damages–both economic and psychological–when crises hit. Naturally, protective effects will be largest for those already covered by the social safety net. For well-targeted programs, this is good news. But this also highlights the importance of effective targeting, as targeting errors that exclude vulnerable people in normal times will have even larger consequences when disaster strikes.