Cash Transfers and Disaster Resilience

CASH TRANSFERS AND DISASTER RESILIENCE
Strengthening the link between relief and development through shock-responsive social protection
A dissertation submitted to the University of Manchester for the degree of MSc International
Development: Public Policy and Management in the Faculty of Humanities
2016
Student ID Number: 9540040
SCHOOL OF ENVIRONMENT, EDUCATION AND DEVELOPMENT

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Table of Contents
Acronyms and Abbreviations........................................................................................................................4
Abstract …………………………………………………………………………………………………………………………………………….5
Acknowledgements.......................................................................................................................................6
Declaration………………………………………………………………………………………………………………………………………………6
Intellectual Property Statement ...................................................................................................................7
1. INTRODUCTION ....................................................................................................................................8
1.2 Definitions .......................................................................................................................................9
1.3 Methodology.................................................................................................................................11
1.4 Challenges and Limitations...........................................................................................................13
1.5 Structure of Dissertation...............................................................................................................13
2. BACKGROUND ....................................................................................................................................15
2.1 The Resilience Approach...............................................................................................................16
2.2 Linking Humanitarian Action with Development: Achieving improved coordination................17
2.2.1 Understanding the roles of Humanitarian Action and Development Aid...............................17
2.2.2 The “development-humanitarian divide” ...............................................................................18
2.2.3 Bridging the “development-humanitarian divide”..................................................................19
2.3 The Emergence of Cash Transfers: Achieving long-term predictable assistance........................20
2.3.1 Humanitarian Emergency Cash Transfers ...............................................................................20
2.3.2 Development Social Cash Transfers ........................................................................................21
2.3.3 Challenges ...............................................................................................................................22
2.4 Chapter Summary..........................................................................................................................23
3. SHOCK-RESPONSIVE SOCIAL PROTECTION........................................................................................26
3.1. Conceptualizing Shock-responsive Social Protection ....................................................................26
3.2. Designing Shock-Responsive Social Protection .............................................................................29
3.3. Financing shock-responsive social protection ...............................................................................30
3.4. Determinants and Challenges of an effectiveness shock-responsive system ..............................31
3.5. Chapter Summary ...........................................................................................................................33
4. CASE STUDY: ETHIOPIA’S PSNP..........................................................................................................35
4.1. PSNP Background ...........................................................................................................................36
4.2. PSNP Contributions........................................................................................................................38
4.3. PSNP Outcomes and Resilience .....................................................................................................40

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4.4. Chapter Summary...........................................................................................................................45
5. CONCLUSION ......................................................................................................................................46
5.1. Looking forward .............................................................................................................................47
5.2. Implications ....................................................................................................................................48
Bibliography ................................................................................................................................................50
APPENDICES................................................................................................................................................55
A. Shock-responsive Social Protection: Palestine Case Study.....................................................................55
B. The 12 Recommendations of the High Level Panel on Cash Transfers...................................................56
C. PSNP Objectives......................................................................................................................................57
D. Comparing the 2011 Humanitarian and PSNP Responses in Ethiopia ...................................................58
List of Illustrations
Figure 1.1 Simple Depiction of development aid........................................................................................10
Figure 2.1 The effect of shocks and stresses n development pathways depending on different levels of
resilience.....................................................................................................................................................16
Figure 3.1. Steps in programme design and management.........................................................................30
Figure 4.1 Regional map of Ethiopia...........................................................................................................35
Figure 4.2 International assistance in Ethiopia...........................................................................................36
Figure 4.3 WFP beneficiaries and food transfers under the PSNP, 2005 - 2009………………………………………41
Box 2.1 The 2014 State of Humanitarian Assistance..................................................................................15
Box 4.1 Core Elements of the RFM .............................................................................................................39
Table 1.1 Typology: Maturity of a social protection system.......................................................................12
Table 2.1 Comparison of Development and Humanitarian aid ..................................................................19
Table 2.2 Comparing costs to recipients of cash and in-kind transfers......................................................21
Table 3.1 Potential role for humanitarian and development actors in delivering shock-resistant social
protection ...................................................................................................................................................28
Word Count: 14,645
Appendices Word Count: 1,090

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Acronyms and Abbreviations
CIDA Canadian International Development Agency
DAC Development Assistance Committee
DFID Department for International Development
DRM Disaster Risk Management
EWS Early Warning System
FAO Food and Agriculture Organization
FCS Fragile and Conflict Affected States
FTS Financial Tracking Service
GHA Global Humanitarian Assistance
GOE Government of Ethiopia
HABP Household Asset Building Programme
HDI Human Development Index
IFRC International Federation of Red Crescent Societies
LEAP Livelihoods Early Assessment and Protection
NGO Non-governmental organization
ODA Official Development Assistance
ODI Overseas Development Institute
OECD Organization for Economic Cooperation and Development
OPM Oxford Policy Management
PIM Programme Implementation Manual
PSNP Productive Safety Net Programme
RFM Risk Financing Mechanism
UN United Nations
UNOCHA United Nations Office for the Coordination of Humanitarian Affairs
USAID United States Agency for International Development
WFP World Food Programme

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Abstract
With rising levels of conflict and fragility, disaster risk management has arrived at the forefront of both
humanitarian and development agendas. Identifying a cohesive strategy for managing risk, is required to
ensure the provision of emergency relief while creating lasting resilience to future shocks. This paper
examines the role of cash transfers in strengthening household and community resilience to climate
related disaster. Synthesizing literature from multiple sectors, this study explores shock-responsive social
protection as a conceptual framework for linking relief with development. Drawing from a case study of
Ethiopia’s PSNP, it can be concluded that, a cash-based social protection system is capable of
strengthening humanitarian and development coordination while ensuring the provision of long-term
assistance. Together, these factors strengthen the ability of societies to resist, cope with and recover from
shocks, thereby making them more resilient to the impacts of disaster.

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Acknowledgements
While the past eleven months have not been without challenges, I am confident the knowledge I have
gained will enable me to become a meaningful contributor to my field. I would like to extend my sincere
and heartfelt appreciation to those who have supported me through this endeavor. Without their support
I would not have had the privilege of furthering my education and experience in this area of international
development.
I would first like to thank my professor and supervisor Dr. Armando Barrientos. As a professor, his class
inspired me to focus my professional aspirations on a pathway that would serve the most vulnerable
members of society. As my supervisor, he provided valuable guidance while always encouraging me to
express my own ideas and opinions.
I gratefully acknowledge my former colleagues from the Independent Evaluation Group of the World
Bank, particularly Dr. Anis Dani, Nick York and Lauren Kelly, who provided continual guidance both
personally and professionally, while also encouraging me to furthermy education through a post-graduate
degree. Thanks are also due to the funding received through the Rotary Club of Fairfax, which allowed me
to pursue my post-graduate degree at the University of Manchester.
Finally I would like to extend my gratitude to my friends and family who have been a source of joy and
comfort throughout this challenging year. I particularly thank Thomas Scott Fix and Kasia Chaberska, who
provided valuable feedback during the final editing of my dissertation.
Recognizing the many individuals who have supported me through this degree and dissertation, any
omission in this brief statement of acknowledgement does not reflect an absence of gratitude.
Declaration
No portion of the work referred to in the dissertation has been submitted in support of an
application for another degree or qualification of this or any other university or other
institute of learning.

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Intellectual Property Statement
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1. INTRODUCTION
Although Official Development Assistance (ODA) has achieved substantial gains in terms of
economic and social indicators over recent years, progress is often thwarted by sudden or slow-
onset disaster (Kuriakose, et al., 2012). In response to these crises, vulnerable households may
fall below the poverty threshold while those already living in extreme poverty are forced into
worsening conditions. Humanitarian assistance may then be required to deliver emergency relief
from the negative impacts of natural and man-made disaster. The increasing magnitude of
simultaneous large-scale crises are stretching the resources of disaster response, and with almost
half of the world’s poor expected to live in countries affected by fragility, conflict and violence by
2030 (World Bank, 2015), identifying a cohesive strategy for Disaster Risk Management (DRM)1
is now of paramount interest. A convergence of responsive disaster relief and long-term
developmental assistance is necessary to ensure that households living in extreme poverty are
supported by sustainable social policy, while additional households forced into transitory
vulnerability also receive the required assistance. Determining a systematic strategy for DRM will
ensure that household, community and state-level developmental gains secure a heightened
degree of resilience to future disaster-related shocks.
This paper seeks to enrich the discussion on how fragile nations may move beyond unstable
emergency aid, particularly food aid and one-off cash transfers, toward a long-term and predictable
source of assistance. The objective of this paper is to examine the transformational role of cash-
based social protection in achieving greater resilience in fragile states, and thus, seeks to answer
the question “do cash transfers lead to greater resilience?” Guided by the theoretical framework
outlined in Chapter 3, this paper will address the following sub-questions:
 Do cash transfers increase collaboration between humanitarian and development
sectors?
 Do cash transfers allow for long-term, predictable assistance?
1
DRM may be better understood as “a combination of: risk identification, risk reduction, preparedness, financial planning, and
planning for disaster recovery” (World Bank, 2013).

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In answering these questions, it becomes possible to determine the feasibility for DRM to
transition vulnerable nations from a position of reactive disaster response to one of preventative
and transformative development. By analyzing the current system of aid delivery in fragile
situations, this paper addresses long-standing inefficiencies affecting humanitarian and
development action, while also exploring the latent potential of cash transfers.
This mixed-methods case study is important and necessary for several reasons. Firstly, the debate
on how to link humanitarian relief with development aid has been conducted in sectoral silos,
therefore allowing discontinuity to emerge. This paper synthesizes the existing evidence among
the fields of study (humanitarian, development, DRM) in order to gain a holistic understanding
of the challenges and possible solutions for achieving resilience. Secondly, the literature review
identifies resource transfers as an emerging mechanism, shared across the sectors. Building upon
this finding, the study explores the potential of cash transfers as an innovative solution to the
financing, coverage and impact inefficiencies resulting from the development-humanitarian gap.
This is further illustrated through an examination of Ethiopia’s cash transfer programme. Lastly,
the topic of resilience is highly relevant given that the past two decades have been punctuated
by significant levels of poverty and inequality at the hand of conflict and natural disaster.
Detecting a strategy which enables households to resist, to recover from, or to adapt to the
effects of shocks or stresses would be a valuable contribution to DRM. The applicability of this
paper’s findings will cut across social, economic, and political barriers making it a valuable
contribution to the discussion on aid delivery and disaster risk management in fragile states.
1.2 Definitions
The world of aid and assistance is complex, involving multi-sectoral strategies, diverse
mechanisms and a wide range of key players. As a result, a central challenge in conceptualizing
the humanitarian-development nexus is a lack of clarity in concepts and definitions (Otto &
Weingartner, 2013). Influenced by unique institutional mandates, pervasive terminology often
differs according to the sector or agency. Because this paper synthesizes the existing knowledge into
a neutral and comprehensive report, a practical starting point is to establish a working definition of
key concepts central to this study: fragility, humanitarian action and development aid.

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Fragility - Recognizing the imperative to properly address how to engage with fragile, conflict-
affected and vulnerable states, it is important to note the disparity among what actually
constitutes a “fragile” state (Stewart & Brown, 2009). Development institutions may define
fragility in terms of a number of factors, including government capacity and willingness to deliver
essential services (DFID), the incidence or risk of violent conflict (USAID), low governance ratings,
or the presence of a United Nations peace keeping mission (World Bank). This paper, however
defines the term “fragility” and “fragile state” by a more general usage, referring to regions which
are subject to or at high-risk of exposure to the damaging impacts of climate-related disaster.
Humanitarian action - This paper adopts an understanding of humanitarian action guided by the
objectives “to save lives, alleviate suffering and maintain human dignity during and in the
aftermath of man-made crises and natural disasters, as well as to prevent and strengthen
preparedness for the occurrence of such situations” (The Sphere Project, 2011). Therefore,
humanitarian action is generally designed to provide responsive short-term assistance in
emergency situations.
Development aid - Development aid is defined as assistance that is expended in a manner
designed to promote long-term
development, whether achieved
through economic growth, social
development or other means. While
development aid may be administered
through a range of actors including Non-
Governmental Organizations (NGOs) and
charities, this paper will focus on Official
Development Assistance (ODA) whereby
funds from 23 countries are channeled
through an intermediary to recipient countries. ODA (as illustrated in Figure 1.1.1) may be better
conceptualized though the following three key characteristics (Keeley, 2012):
 It comes from governments, either at national or state level, or from their official agencies;
Source: (Fengler & Kharas, 2011: p3)
Figure 1.1 Simple Depiction of development aid

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 It is targeted at improving the economic development and welfare of developing countries;
 It is either a grant, or a loan at a rate less than market interest rates.
1.3 Methodology
This paper utilizes a mixed-methods case study approach in exploring the role of cash-based
social protection and disaster resilience. The question which motivates this paper, “do cash
transfers lead to greater resilience”, does not seek to determine a precise measurement of a
predetermined hypothesis, but rather, aims to contribute a holistic understanding of the causes
and possible solutions to climate-related fragility. Although this subject is well-suited for a
qualitative approach, the flexibility and openness associated with a qualitative analysis may
compromise overall clarity and focus. This study, therefore, employs a mixed-methods approach
through triangulation, converging both quantitative and qualitative data in order to produce a
comprehensive analysis of the research question (Creswell, 2003) for more robust findings
(Becker, 2012). Primary data is sourced from the most recent United Nations Office for the
Coordination of Humanitarian Affairs Financial Tracking Service (UNOCHA FTS) and World Bank
indicators in order to substantiate the study’s findings. Secondary data is procured through
institutional programme reports and evaluations produced principally by the World Bank,
Overseas Development Institute (ODI), World Food Programme (WFP) and Global Humanitarian
Assistance (GHA).
A critical assessment of the research questions and objectives guided the identification of
keywords for the literature search including, but not limited to: “fragility”, “resilience”, “cash
transfers”, “social protection” and “disaster risk management”. Information was sourced from
articles in academic journals, literature reviews, reference books, electronic libraries such as
MetaPress, Sciencedirect and Jstor, and international institutions that have contributed research
in this field, primarily the World Bank and ODI.
In examining how a collaborative form of cash-based social protection may achieve greater
resilience in fragile states, a country case analysis will complement the mixed-methods approach,
while helping to keep information narrowly framed around the issue of interest. The study is

12
directed toward regions acutely vulnerable to climate-related crises and which have existing
state-led social protection programmes. Therefore, those systems which are facilitated entirely
by external actors, are excluded from this study. Table 1.1 below outlines a typology for better
understanding the levels of maturity in regards to state-involvement within a social protection
system. Although an exploration of shock-responsive social protection is highly relevant to fragile
and conflict affected states (FCS), countries under these contexts rarely have a secure state-led
social protection policy system in place, making it difficult to scale up in times of crisis. For this
reason, the study will center attention exclusively on countries subject to climate-related fragility
while excluding those affected by conflict. The feasibility of establishing such programmes in FCS,
however, should not be discounted as there are a number of successful cases (Ovadiya, et al.,
2015), and should therefore be regarded as an area for further research. (See Appendix A for
Palestine case study).
Table 1.1 Typology: Maturity of a social protection system
In order to provide quantifiable evidence, supporting the strategy outlined in this paper, Ethiopia
was selected for a country analysis under the following criteria:
Category of maturity Description
1 Non-existent No state interest in developing log-term social protection
and ad-hoc foreign aid/ humanitarian interventions
2 Internationally led No clear progress in state policy, but emerging foreign aid
interventions shaping up towards a system with some
elements of harmonization or coordination
3 State-led interest Some state interest to expand social protection (to the
most vulnerable), with some elements shaping up, e.g.
Scaled-up aid-supported interventions or an outline of
what could become a national flagship programme
4 State-led commitment Commitment to expand social protection (as articulated in
e.g. National strategy), with some flagship initiatives for the
poor (co-)funded by the state
5 State-led expanding Clear state policies/laws and a growing set of social
protection schemes
6 State-led mature Well established system with high coverage of populations
and needs
Source: (OPM, 2015: p3)

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1.) The country has a state-led social protection system in place (falling between state-led
interest, commitment and expanding, but excluding state-led mature) (World Bank, 2013)
2.) The country is subject to climate-induced fragility. (World Bank, 2013)
3.) The country is the leading non-FCS country listed as a top recipient of international
humanitarian aid over the period 2001-2010, requiring US$5.3 billion (GHA, 2012).
1.4 Challenges and Limitations
Although the research achieves its objective of examining the relationship between cash and
strengthened resilience, there are two limitations to the study. Firstly, the research is limited in
primary data. Informational interviews, surveys and alternate forms of primary data collection were
not possible, due to time constraints. Of the data collected from extant evaluations and databases,
data points were often missing, acknowledging that research and evaluation of humanitarian action
often occurs in data-poor, complex and insecure environments (ODI, 2015; Slater & Bhuvanendra,
2013). Secondly, in order to maintain a depth of focus, this study encapsulates only a small portion
oftheshock-responsiveframework.The originalframeworkextendstobothnatural (climate-related)
and man-made (conflict) disaster where the state-led social protection system may range from “non-
existent” to “state mature” (see (See Appendix A for Palestine case study).
Table 1.1.1). However, the scope of this study is narrowly limited to contexts of climate-related
disaster, thus excluding conflict and FCS. While the case study of Ethiopia’s PSNP provides insight
into the opportunities and challenges presented by cash transfers in drought prone regions, it is
important to note that it represents only one of many approaches to shock-responsive social
protection.
1.5 Structure of Dissertation
This dissertation will be organized into five chapters followed by an appendix. Chapter 2 will
briefly introduce the current state of international disaster assistance, considering both
humanitarian relief and long-term development. The introduction is followed by a discussion on

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resilience and its core components which guide the conceptual framework: 1.) the facilitation of
improved coordination between humanitarian and development sectors and 2.) the provision of
long-term, predictable assistance. In examining these elements, the section assesses the
development-humanitarian divide, the need for improved multi-sectoral coordination, the
emergence of cash transfers and the provision of long-term assistance. Chapter 3 provides a
comprehensive review of shock-responsive social protection as outlined by Oxford Policy
Management (OPM) and the UK Department for International Development (DFID). The section
will explore how the cash-based framework is capable of achieving greater resilience in climate-
fragile states regarding the two aforementioned guiding components.
Chapter 4 presents a case study in order to further illustrate the link between cash transfers,
shock-responsive social protection and resilience. Ethiopia’s Productive Safety Net Programme
(PSNP) is the second largest social protection programme in Sub-Saharan Africa (Drechsler &
Soer, 2016). Having withstood significant programming challenges, including several major
droughts, the PSNP provides a robust example of scalable shock-responsive social protection.
Observations from the case study, therefore, allow the paper to draw certain conclusions
pertaining to cash-based systems and resilience in fragile states. The last chapter will conclude
with the results of the study, key messages, and implications, for strengthening the cash and
resilience agenda. An appendix will follow the report including supplementary tables, charts and
data which reinforce the study.

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2. BACKGROUND
The 2014 crisis of simultaneous large-scale disasters notably typhoon Haiyan in the Philippines, the
Ebola outbreak and ongoing conflict in South Sudan and Syria, left approximately 60 million people
around the world displaced. The magnitude of shocks abruptly stretched the capacity of foreign
aid, revealing striking weaknesses in state-led response to both natural and man-made disaster
(See 2.1) (FAO, 2016). The 2015 State of the Humanitarian System report declared that the
international humanitarian action is at the “wrong scale and is structurally deficient to meet the
multiple demands that have been placed upon it.”2 (ODI, 2015). With almost half of the world’s
poor expected to live in countries affected by fragility,
conflict and violence by 2030 (World Bank, 2015),
identifying a cohesive strategy for aid delivery is of
paramount interest.
The global crisis is further exacerbated by increasing
climate change, together making a strong case for
aid reform, particularly in regards to DRM. Research
encourages stronger links between humanitarian
and development actors in order to reduce the need
for recurrent humanitarian assistance, facilitate an
effective response to external shocks and strengthen
resilience (HPN, 2012). Although substantial
progress has been made in the search for shock-
responsive programming, without a consolidated and unified strategy, these gains may still be
vulnerable to future disaster-related crises. In fact, unless measures are taken to reduce risks,
the impacts of climate change, natural disasters and conflict are likely to be regressive:
undermining poverty goals and exacerbating inequality (World Bank, 2013; ODI, 2015). A
reassessment of state-led disaster response is necessary to accelerate critical adjustments, aimed
at improving stakeholder coordination, reducing the impacts of shocks and strengthening
2 Quotation from (ODI, 2015: 12).
59.9 Million People: The number of
refugees and internally displaced persons
due to conflict at the end of 2014
19.5 Million People: The number of people
forced from their homes by natural
disasters in 2014
17 Years: The average length of
displacement.
550%: The increase in the size of the UN
global humanitarian appeal from 3.4 billion
in 2003 to $18.7 billion in 2015
40%: The shortfall in response to UN
humanitarian appeals in 2014
Source: (FAO, 2016: p 1)
Box 2.1 The 2014 State of Humanitarian Assistance

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transparency and accountability within those states that are vulnerable to natural disaster (ODI,
2015). The following section will introduce a theoretical framework for integrating these factors
into a cohesive strategy, and thus bolstering existing methods of DRM.
2.1The Resilience Approach
Experts (Cherrier, 2014; Harvey, 2005; Kukrety, 2005; Slater & Bhuvanendra, 2013) have studied
methods for achieving scalable and sustainable solutions to counter external shocks, which result
from natural disasters. These ideas have
mainstreamed into policy dialogue as
governments, donors and implementing
agencies have converged in the pursuit of
improved partnerships, reduced costs,
programme up-scaling and strengthened system
outcomes in relation to DRM. These concepts
provide the foundation for the Resilience
framework (Mitchell, 2013).
The Resilience approach “focuses on the ability
of countries, communities, households and
individuals to resist, to recover from, or to adapt
to the effects of shocks or stresses” (Otto &
Weingartner, 2013). Resilience protects
previously successful advances in development
across multiple disciplines, thereby preserving a
degree of structural integrity and reducing the
need for protracted humanitarian assistance. The aim of resilience programming is, therefore, to
ensure that shocks and stresses do not damage or impede development progress as measured
by the Human Development Index (HDI), economic growth or other means (Mitchell, 2013).
Figure 2.1 illustrates the potential impact on development programming of multiple compacting
Source: (Roussy, 2013: p5)
S
Figure 2.1 The effect of shocks and stresses in development
pathways depending on different levels of resilience

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stresses3 over the long-term (upper diagram) and a single short-term shock4 (lower diagram). To
safeguard development progress, deliberate countermeasures are required at pivotal moments
to offset the impact of shocks. Disaster prone regions, however, are complex and the
countermeasure employed must be strategically selected in accordance with the region’s
context. With this in mind, resilience should be viewed as an adapting process rather than as an
outcome. (Norris, et al., 2008)
State organizations and multi-lateral institutions have already contributed valuable work in this
area through diverse projects ranging from rural livelihood support to disaster insurance, and
from household asset protection to housing upgrades. One approach which runs consistently
throughout the literature is the use of social protection and its ability to promote resilience in
high-risk situations through: 1.) the facilitation of improved coordination between humanitarian
and development sectors and 2.) the provision of long-term, predictable assistance (DFID, 2011;
World Bank, 2013). Indeed, Holmes (2010) posits that long-term funding, institutional
coordination and capacity building are central to ensuring the sustainability of social protection
at scale. The following section will explore the role of social protection in attaining these two
objectives on the pathway towards resilience.
2.2Linking Humanitarian Action with Development: Achieving improved coordination
2.2.1 Understanding the roles of Humanitarian Action and Development Aid
Although humanitarian aid can be traced back to the 1800’s, the modern form of humanitarian
aid emerged during the mid-part of the 20th century following World War I (Rysaback-Smith,
2015). The Treaty of Versailles established the League of Nations, which later became the United
Nations, ratified the Universal Declaration for Human Rights and established the four basic
principles that govern humanitarian aid: humanity, neutrality, impartiality and independence
(ibid.). Since then, the role of humanitarian work has largely been associated with emergency
response to natural and man-made disasters such as earthquakes, typhoons and military conflict.
3
Compacting stresses include slow on-set drought or on going famine.
4
A short-term shock may be a flood, earthquake, hurricane, etc.

18
Similar to the origin of humanitarian assistance, contemporary international development theory
also came about in response to conflict. Following World War II in 1948, the United States
adopted the Marshall Plan with the intent of rebuilding European nations devastated by the war
(Edwards, 2014). Dissimilar to the emergency life-saving focus of humanitarian action,
development aid prioritized reconstruction and economic development. It was not until the
founding of the Development Assistance Committee (DAC) and Organization for Economic
Cooperation and Development (OECD) in the 1960’s, that theories of development began to
identify with long-term poverty alleviation, human development and improved livelihoods (ibid.).
2.2.2 The “development-humanitarian divide”
In many cases, populations in need of emergency humanitarian assistance are the same as those
with the most urgent need for strengthened livelihoods and development. Both sectors target
populations, which are victimized by, and vulnerable to multidimensional covariate shocks5. As
a result, the terms “humanitarian action” and “development aid” are often used
interchangeably. However, this lack of clarity inevitably leads to poor use of resources and
weakened programme outcomes. Despite the areas of convergence between these two
communities of practice, there are stark differences in working principles, mandates, values
and assumptions (See Table 2.1) (Hinds, 2015). Consequently, humanitarian work and
development aid continue to operate independently creating what is widely known as the
“development-humanitarian divide” (SPIAC, 2016).
This division is evidenced by disparate funding streams, operational partners and
implementation frameworks and as a result, significant resources are channeled into an often
fragmented system. Poor alignment among these sectors lead to duplicated coverage of
beneficiaries, inefficient spending and sometimes competition among organizations due to a lack
of mitigating policies by local governments (Moore, 1999). A system lacking donor cohesion can
5
In contrast with idiosyncratic shocks which affect individuals such as loss of employment or illness, covariate
shocks affect entire communities (e.g. economic crises, climate-related disaster and conflict) (Holmes & Bastagli,
2014)

19
also undermine a government’s ability to deliver reliable assistance, thereby damaging the
citizen-state relationship and threatening future policy and institutional building (ODI, 2015).
Table 2.1 Comparison of Development and Humanitarian aid
Development aid Humanitarian action
Degree of regularity/reliability: Strong None
Degree of state regulation:
Strong (regulated by state and
development actors)
Very weak (regulated by
humanitarian actors)
Duration: Long-term sustainable programming Short-term rapid response
Responds to: Ongoing structural Issues Emergencies (during and aftermath)
Focus:
Economic, environmental,
institutional and social development
Save lives, alleviate suffering,
maintain and protect human dignity
Instruments
Cash transfers, pensions, insurance,
social services, policy
Cash grants, food aid, material relief,
support services
Source: Table was created by author using information from Guidance Note for Humanitarian practitioners (Kukrety, 2016)
2.2.3 Bridging the “development-humanitarian divide”
There have been few initiatives directed specifically toward bridging the development-
humanitarian divide, despite the severity of its consequences. Institutional leaders, governing
bodies and specialized agencies do not receive forceful and persistent pressure by the donor
community for development-humanitarian alignment, and thus, dissonance, self-interest and
competition prevail. Moore (1999) asserts, “There is no shared view which is active and
operationalized of a common whole, insufficient leadership to provide it, and therefore little
inclination to attain it.”
Notwithstanding, there are clear programmatic areas of overlap between development
assistance and humanitarian action, providing an opportunity to increase sectoral cohesion.
Amidst the blurring lines between development aid and humanitarian action is the transfer of
resources to those affected by crisis: the “social transfers” provided through state-led social
protection system, and the “emergency transfers” of humanitarian response (ODI, 2015). Having
identified resource transfers as an area of convergence, the next section will provide an in depth
look into these instruments, the rationale for their use in humanitarian and development
programming, and their ability to provide long-term predictable assistance.

20
2.3 The Emergence of Cash Transfers: Achieving long-term predictable assistance
2.3.1 Humanitarian Emergency Cash Transfers
In light of the increased fragility seen in recent years, ODI has been researching alternate forms
of humanitarian assistance to better address disaster response. ODI’s research is largely
influenced by Amartya Sen’s Poverty and Famines (1981), in which he establishes a theoretical
case for the use of cash transfers in countries vulnerable to drought and natural disaster. Sen
(1981) argues that famines are caused not by a shortage of food, but rather the inability of the
poor to afford food. Building upon this theoretical framework, a new wave of research emerged
concerning the feasibility and implications of adapting cash-based emergency assistance. As a
result, leading humanitarian institutions are experimenting with cash and voucher systems as
an alternative to more costly in-kind relief, such as food aid, seeds and shelter (ODI, 2007).
Recent findings suggest that short-term cash transfers may be more cost-effective and capable
of producing multiplier effects in local economies (Harvey, 2005). For example, Barrientos, et
al. (2010) highlight the tendency for the poor to purchase locally produced food and goods,
whereas wealthier individuals purchase imports. Cash transfers therefore, are linked with
multiplier effects stimulating the domestic and local economy. Indeed, a cross-country analysis
conducted by ODI (2015) finds that 18% more people could be assisted at no extra cost through
the provision of cash transfers instead of food. Table 2.2 illustrates a cost comparison between
cash transfers and the more traditional in-kind food transfers. It is now widely accepted by
DRM experts, that a cash transfer system is capable of responding to emergencies at a faster
rate than traditional in-kind humanitarian assistance, while also reaching a larger number of
people (ODI, 2007; Harvey, 2005). These findings are supported by an intensive study facilitated
by ODI’s report of the High Level Panel on Humanitarian Cash Transfers, in which the institution
identifies more than 200 resources and studies substantiating the feasibility, cost and
effectiveness of cash transfers in relation to humanitarian response and long-term poverty
reduction (ODI, 2015).

21
Table 2.2 Comparing costs to recipients of cash and in-kind transfers
In-kind Assistance Cash Transfers
Cost of transporting in-kind relief from the
distribution site to home
Costs of getting to and from markets to buy goods
with the cash provided and to and from the cash
distribution point
If people have to sell part of in-kind assistance to
meet other needs they may get a low price for it
Cost of transporting goods purchased in local
markets
Milling costs if whole grains are distributed Milling costs if whole grains are purchased
Source: (Harvey & Bailey, 2009: p39)
Influenced by these findings, humanitarian aid has seen a shift over the past few years, from a
reliance on in-kind relief, to a steady inclusion of cash and voucher transfers. It is now estimated
that cash-based assistance has risen from less than 1% in 2004 to around 6% of total humanitarian
spending today (ODI, 2015). A 2012 article in the Humanitarian Exchange recorded an estimated
four million people benefitting from humanitarian cash or voucher programmes in the Horn of
Africa region. Ethiopia, discussed later in the case study, serves as an example of one such nation
undergoing a significant transformation in disaster response. Food aid has declined from US$630
million in 2008 to approximately US$246 million in 2012, a trend that persisted even through the
2011 Horn of Africa drought (GHA, 2014). Although a cash-based solution is becoming more
prevalent in humanitarian response, emergency cash transfers should also be complemented by
the provision of public goods and services that markets may be unable to provide satisfactorily,
such as social protection, sanitation and immunization (Slater, 2008). This creates a window of
opportunity for collaboration between state-led development and humanitarian action.
2.3.2 Development Social Cash Transfers
The use of cash transfers in social protection has permeated the development agenda since the
mid-1990’s, creating a revolutionary shift in how the challenges of poverty reduction and human
capital growth are approached. While the provision of cash alleviates immediate poverty, it is
also shown to lift constraints to productive capacity among recipients, allowing for long-term
human development and economic growth (FAO, 2016; Barrientos, et al., 2010). Encouraged by
the success of cash transfer programming in Latin America, and supported by a large body of
growing evidence, lead development actors such as the World Bank are now promoting the use

22
of cash transfers in developing countries as a means for reducing short-term poverty, while also
contributing to long-term growth (Barrientos, 2011).
Although cash-based social protection, also referred to as “social transfers”, has become
popularized in poverty and vulnerability discourse, it is important to note that the influence of
cash transfers on non-income risks have been largely absent from the debate (Holmes, 2010;
McConnell, 2010). Acknowledging this gap is critical in recognizing the favorable role social
transfers can play in high-risk countries that are prone to natural disaster. This commonly
accepted understanding of social protection therefore requires a degree of adaptation when
applied to fragile situations, in order to expand the scope beyond economic vulnerability, and
incorporate the effect on non-income risks such as insecurity, emergency response and citizen-
state relations (Holmes & Harvey, 2007; Holmes, 2010).
In a background paper prepared for the Conference on Promoting Resilience through Social
Protection in Sub-Saharan Africa, Jesse McConnell (2010) sheds light on the functional role of
social protection in achieving broader development objectives by transforming fragility into
resilience. His study posits that developmental cash transfers extend beyond poverty reduction
when used as a tool to increase state legitimacy and institutional capacity through improved local
service delivery and the state-led prioritization of human rights. Although his study focuses more
narrowly on FCS, the impact of cash transfers on strengthened governance and citizen-state
relations holds equal value to those regions prone to non-conflict shocks. Cash transfers,
therefore, are an appropriate mechanism for addressing not only poverty and vulnerability, but
also challenges associated with crisis response including governance and resilience (McConnell,
2010). Based on these findings, Appendix B highlights twelve recommendations by the High Level
Panel supporting the increased use and integration of emergency and social transfers for
strengthened emergency response (ODI, 2015) .
2.3.3 Challenges
Those discouraging cash transfers fear that, while they provide steady predictable flows of
income to those who are vulnerable, the system may create expectations of long-term support

23
and thus, dependency. Dissidents, therefore, often view the transfers as charitable handouts
used by beneficiaries for unproductive ends (Holmes, 2009; Britto, 2005). There are also concerns
that in areas marked by weak infrastructure, a cash-based system may be prone to corruption
and inadequate security (Holmes & Harvey, 2007; ODI, 2007).
The emerging evidence from recent programmes seem to invalidate a large number of these
concerns. Recipients of emergency cash transfers have been found to spend income responsibly
(Barrientos, et al., 2010), using the additional funding on immediate basic needs as well as on
investments in education (Holmes, 2010). In this case, cash transfers are seen not only as short-
term poverty relief, but also as an investment in future productive capacity. In regards to
corruption and security, it is true that state institutions may experience difficulty in delivering
timely assistance to remote regions, particularly where civil unrest is present. However,
improved cohesion with humanitarian actors, who are well equipped to access difficult regions,
provides a viable solution to safely deliver transfers to the intended beneficiaries (Creti & Jaspars,
2006). Additionally, changes in technology and growing access to financial services carry the
possibility of facilitating an instant electronic transfer, whereby all assistance is instantly
recorded, thereby reducing the tendency toward corruption (ODI, 2015).
Notwithstanding the above mentioned arguments, determining the appropriate tool for any
given context (cash, food, other in-kind of a combination) should always be proceeded by a
market assessment (Holmes & Harvey, 2007). Evidence however, gives strong support for the
feasibility and benefits of employing a cash-based system over other traditional forms of
assistance, both in humanitarian and development contexts. Research shows that cash transfers
are capable of responding to emergency crisis, as well as providing long-term predictable
assistance (Cherrier, 2014). The next step thereafter, is to identify a working model for
incorporating a collaborative cash-based system into the resilience framework.
2.4 Chapter Summary
This chapter introduced resilience as a framework for responding to a global context of increasing
natural disasters, heightened conflict and mounting fragility. The framework focuses on the

24
ability of countries, communities, households and individuals to resist, to recover from, or to
adapt to the effects of shocks or stresses (World Bank, 2012). Because of its large scope and
multi-sectoral applicability, resilience holds the potential for both collaborative synergies among
stakeholders and for tapping into a more effective form of aid delivery in high-risk situations. In
identifying resource transfers as a common theme in resilience discourse, this chapter proceeded
with an exploration of its role in providing assistance in high-risk contexts.
Despite the ongoing presence of what is known as the “development-humanitarian divide”, there
are particular areas of overlap between the sectors. The use of cash transfers have become
increasingly popular in both arenas, providing an opportunity for collaborative programming.
Evidence shows that cash transfers are capable of responding to emergencies at a faster rate than
traditional in-kind assistance, while also reaching a larger number of people. From a development
perspective, predictable cash transfers provide immediate poverty reduction while contributing to
long-term growth. In light of research providing significant counterevidence against dissident
concernsof corruption and security, cashtransfersappeartobe afavorable instrumentforproviding
both emergency relief and long-term developmental assistance.
As mentioned, the humanitarian sector is equipped to provide rapid response in high-risk
countries, while state-led social programming tends to be less shock-responsive due to supply
side constraints and security risks. When considered concurrently, emergency cash transfers
combined with long-term social transfers, offer a window of opportunity for exploring shock-
responsive social protection. A closer examination of cash transfers and resilience may lead to a
scalable form of social protection, which would provide the flexibility required for responding to
both short-term emergencies and long-term needs.
In alignment with these findings, institutions have begun integrating disaster resilient social
protection into their research and operational agenda. In 2015, ODI published a preliminary
guidance note for “Shock-responsive Social Protection Systems” which launched an ensuing
research programme for further developing the concept. Although there is an expanding body of
literature being produced in this area, many studies (Holmes & Bastagli, 2014; Kuriakose, et al.,
2012; McConnell, 2010) are inclusive of all forms of social protection (cash, in-kind, pensions and

25
labor market programmes). Guided by the research question set out in the introduction of this
paper, the following chapter will analyze exclusively cash-based forms of shock-responsive social
protection and its potential for securing resilience in high-risk states.

26
3. SHOCK-RESPONSIVE SOCIAL PROTECTION
The past decade has seen a large increase in the number of countries institutionalizing formal social
protection schemes. According to the World Bank, more than 1.9 billion people in 136 countries are
currently benefiting from social assistance programmes, of which 718 million people are enrolled in cash
transfer programmes (FAO, 2016). The previous section identified two key reasons explaining why cash-
based social protection is an appealing instrument for achieving greater resilience in risk-prone countries:
 Improved sectoral coordination: The strategic use of cash transfers is an area of convergence
between humanitarian action (emergency transfers) and development aid (social transfers).
Building upon these overlapping themes may allow for increased synergy, improved cost-
effectiveness, and robust programme outcomes.
 The provision of long-term predictable assistance: Emergency transfers are a more cost-
effective and timely means for delivering humanitarian assistance. Social transfers provide
immediate poverty alleviation while contributing to long-term growth. Taken together, cash
transfers are a vehicle for tackling not only immediate poverty and vulnerability, but also
challenges associated with crisis response, including governance and resilience. When integrated
into an institutionalized social protection programme, cash transfers are capable of delivering
long-term predictable assistance in high-risk contexts.
Ensuring these outcomes lead to greater resilience, necessitates a clear framework linking humanitarian
assistance, development aid and DRM. This section will synthesize the existing literature on shock-
responsive social protection.
3.1. Conceptualizing Shock-responsive Social Protection
In accordance with the larger discussion on DRM, there are a number of institutions which have begun
research into shock-responsive social protection in order to increase the resilience of vulnerable
populations. How the idea is conceptualized varies from “shock-ready” (McCord, 2013) to “climate
responsive” (Kuriakose, et al., 2012) to “shock-responsive” social protection (OPM, 2015). Acknowledging
the slight degree of variance among these themes, the literature shows a clear convergence on four key
features (OPM, 2016).

27
1.) Type of social protection: As established in the preceding chapter, experts have largely accepted
that (cash-based) social transfers are a more effective form of social protection. Although the
option for conditionality6
is often a subject of debate, unconditional cash transfers are typically
more appropriate in low-income high-risk contexts due to flexibility, simplicity and political appeal
(ibid., p17).
2.) Scaling up response in emergencies: Shock-responsive social protection rapidly expands during
emergency response and return to its original scale following the crisis. The appropriate manner
and degree to which a social protection programme scales up is based on a careful market
analysis. OPM has identified five context specific options for scaling up which will be discussed
later in this chapter (ibid., p17).
3.) Policy features for design and implementation: The literature coincides over the inclusion of six
fundamental policy features: integration of climate and disaster risk considerations into the
planning and design of social protection programmes; links to an established early warning
system; central registries for targeting, verification and disbursement; coordination through a
single central agency; pooling and smoothing of donor funds for safety nets to enable
governments to prepare for crises in advance and build systems; and innovative partnership
arrangements including public, private and non-state actors” (ibid., p18).
4.) Links to DRM and climate change adaptation: Shock-responsive social protection requires equal
attention paid to disaster risk reduction/prevention and crisis response and recovery (ibid., p18).
In order to fulfil these key features, it is necessary to link humanitarian emergency transfers with long-term
social assistance. In fragile contexts, the degree to which an established social protection system is in place
may vary, therefore OPM (2015) offers a simple typology of contexts for identifying an entry point for
engagement. The basic level comprises those regions where social assistance is absent or is extremely weak.
The intermediate levelis inclusive of regions where socialassistance systems exist, but are not yet responsive
to covariate shocks. Those contexts which are considered advanced have established social assistance
programmes which are shock-responsive. According to a region’s context, the existing social protection
programme may be adjusted in response to shocks, or in the absence of a properly functioning programme,
other paths of engagement may involve the development of new programmes and policies. The specific
6 Conditional cash transfers are those which are combined with asset accumulation whereby beneficiaries receive a transfer
conditional on their fulfillment of stated interventions generally focused around human, financial or physical development
(Barrientos, 2013).

28
roles of humanitarian assistance and development aid (Table 3.1Table 3.1) are determined by the
programmatic method selected. OPM has organized these pathways into the typology below (OPM, 2015).
1.) Vertical expansion: “increasing the benefit value or duration of an existing programme for
existing beneficiaries”
2.) Horizontal expansion: “adding new beneficiaries to an existing programme”
3.) Piggybacking: “using a social protection programme administrative framework to deliver
assistance, but running the shock-response programme separately”
4.) Shadow alignment: “running a parallel humanitarian system that aligns as best as possible with a
current or possible future social protection programme”
5.) Stand-alone humanitarian intervention: “in the absence of a social protection programme,
humanitarian actors may implement an independent intervention.”
Table 3.1 Potential role for humanitarian and development actors in delivering shock-resistant social protection
Scale up
option
Potential role/activities:
Humanitarian Actors Development Actors
Vertical Scale up
 Assist the state in raising resources
 Transfer of resources to gov’t system
 Influence design of existing social assistance
 Supporting monitoring and evaluation
 Process is led primarily by
government/development
actors
 Financed primarily by
actors
Horizontal Scale
up
 Assist the state in targeting, verification and
registration of new beneficiaries
 Assist the state in raising resources
 Transfer of resources to gov’t system
 Support delivery of transfers in new areas as needed
 Influence design of existing social assistance
 Process is led primarily by
actors
 Financed primarily by
actors
Piggy Backing
 Responsible for design and implementation of
humanitarian response through: (i) using the existing
beneficiaries list; and/or (ii.) using the cash delivery
mechanism
 Share information on additional beneficiaries with
gov’t partners
 Involve gov’t in implementation to enhance capacity
building
 Provide the beneficiary list and
cash delivery mechanism from
existing social protection
programme
 Assist humanitarian-led scale up
while learning best practices
 Modify existing social protection
programme to become more
shock-responsive
Shadow Alignment
 Process is primarily led by humanitarian actors
where (i.) a social protection system is too weak or
underdeveloped (ii.) a social protection system does
not yet exist
 Design and implement pilot programmes that can
be scaled up/adopted by governments in the future
 Transfer of knowledge/skills to state actors
 Assist humanitarian actors in
delivering emergency assistance
programme while learning best
practices and increasing capacity
Source: Table was created by author based on information provided in Guidance Note for Humanitarian practitioners (Kukrety, 2016)

29
3.2. Designing Shock-Responsive Social Protection
In accordance with Kukrety’s (2016) guidance note, the first step in designing shock-responsive social
protection is conducting a thorough assessment for shock-responsiveness. This step comprises both a
needs based and market assessment, in addition to an analysis of the existing social protection system.
Such an analysis is necessary for determining the choice of, direction and magnitude of a technical
response to an emergency. If a cash-based response is determined the most appropriate form of
emergency response, the findings from the assessment will be further used to determine the system
status (the level of shock-responsiveness of a social protection system) as either basic, intermediate or
advanced (Kukrety, 2016).
Contingent upon a context’s system status, the next phase requires identifying the most appropriate form
of linking humanitarian emergency transfers with developmental social protection. The decision for how
a social protection system should be scaled must consider funding constraints, capacity and programme
objectives (OPM, 2015). When the appropriate method of engagement has been decided, planners enter
in the design and implementation phase of the programme involving: targeting, determining the transfer
value, establishing accountability and monitoring measures, identifying recovery plans and an exit
strategy, etc. This process should be in accordance with the aforementioned key policy features, such as
strengthened communication, operation through a centralized registry for targeting, verification and
distribution and coordination through a single central agency. The final phase requires using learning for
future preparedness. Because the concept of shock-responsive social protection is relatively new, the
collection and dissemination of lessons learned is essential to the improvement of future programming
(Kukrety, 2016). These five steps are illustrated in Figure 3.1Figure 3.1.
Much of the literature which has been produced on shock-responsive social protection has been produced
strictly from a humanitarian or a development perspective. Because this particular study attempts to
synthesize the divided literature into one central resource which is equally relevant to both sectors, the
remainder of this paper will focus specifically on contexts where both humanitarian and development
sectors are actively engaged. In most countries which have faced protracted conflict or fragility, state-run
social protection systems do not exist. In these Fragile and Conflict affected states (FCS), if a social
protection system is indeed in place, it is more often operationalized by humanitarian actors only.
Although Kukrety (2016) identifies stand-alone humanitarian programmes as an optional route for

30
Source: (Kukrety, 2015: p15)
meeting these basic contexts, the focus of this research and selected case study will pertain to the
immediate and advanced contexts, where there is an existing state-led social protection system.
Figure 3.1. Steps in programme design and management
3.3. Financing shock-responsive social protection
The financing of shock-resistant social protection requires a degree of collaboration between
humanitarian and development resources. Emergency responses can be financed either through domestic
governments or with international assistance (ODA, UN, IFRC, etc.). It is therefore important to note that
not all shocks lead to appeals for international humanitarian assistance (OPM, 2016). For instance, within
advanced contexts, a shock-resistant social protection system may already be in place, whereby the
government possesses sufficient resources and capacity to manage the crisis without filing a formal
appeal. Although the distribution of financing responsibility depends largely on a context’s capability and
system status (the level of shock-responsiveness of a social protection system), there is still a considerable
amount of uncertainty in how a programme should be definitively financed (ibid.). It is possible to outline
recent trends in the funding of humanitarian response and social protection in order to surmise a
pragmatic set of pathways for funding collaborative shock response.
Preparedness
Step 1 Step 2 Step 3 Step 4 Step 5
NeedsAssessment+MarketAssessment+SP
SystemAssessmentforshock-responsiveness
Determine system
status
Select humanitarian programme option and
decide the role for humanitarian actors
DesignandImplementationoftheprogramme
(ResponseandRecovery)
Uselearningforfuturepreparedness
ADVANCED
Vertical or horizontal scale up of existing SP system
Shadow alignment of humanitarian programme
where necessary
Fill gaps through piggy backing or standalone
humanitarian programme where necessary
INTERMEDIATE
Vertical scale up if possible
Piggy backing on the existing SP system if possible
with SP system
Design and implement standalone humanitarian
programme where necessary
BASIC
with SP system
Design and implement standalone humanitarian
programme where necessary
Coordination, Communication, Documentation and Influencing

31
International humanitarian response is triggered by the launch of a formal appeal by the United Nations
(UN) or the International Federation of Red Cross and Red Crescent Societies (IFRC). Funding is then
channeled from donors to recipients through a complex system generally mitigated through UN agencies
who subcontract to a mixture of front line recipients. A study by Cabot Venton, et al. cited in OPM (2016)
found that between 2009-2013, approximately two thirds of international humanitarian assistance was
distributed to multilateral organizations, followed by domestic and international NGOs (19%), the IFRC (9%),
and the private sector (8%). A small portion of these funds are reserved for UN-managed “humanitarian
pooledfunds,” intendedto enable rapidresponse to sudden-onset crisis.These pooledfunds comprise: CERF
(a grant and loan awarding facility), Emergency Response Funds (flexible funding pools to address critical
gaps in emergencies), and Common Humanitarian Funds (country-based pooled funds). Although a portion
of humanitarian assistance is spent on cash transfers, the actual amount which is spent on social protection
is unclear, due to the fact that it is often integrated into larger programmes rather than labelled explicitly as
a cash-based response (GHA, 2015).
In comparison with humanitarian relief, social protection is funded domestically, either through taxation or
externally through donor support. Though it is not always the case, social assistance programmes in low-
income countries are generally financed through external donor support such as Ethiopia’s PSNP. Financing
shock-responsive social protection requires identifying a mechanism which is flexible and adaptable to
rapidly changing contexts. ODI’s literature review of shock-responsive social protection highlights a number
of financing instruments including reserve funds, traditional insurance, post-disaster credit (borrowing) and
sovereign risk financing. There also remains the key question of how to link the above mentioned
humanitarian and development funding for more responsive and cost-efficient programming. Some
countries have experimentedwitha contingency fund: a poolof money, whichis set aside for crisis response.
The concept follows that when an emergency is elevated to a pre-defined level, the crisis response is
triggered, informing programming to advance from development funding to humanitarian funding. Chapter
4 will elaborate on contingent funding through a case study of Ethiopia’s PSNP.
3.4. Determinants and Challenges of an effectiveness shock-responsive system
Although there have been a number of pilot programmes testing shock-responsive social protection, the
outcomes are considerably varied due to the highly complex and dynamic context of crisis-prone regions.
A shock-resilient social protection programme’s level of success in terms of maximized utility, is highly
dependent upon the facilitating and constraining political economy factors (Lavers & Hickey, 2015). Before

32
establishing a targeting mechanism and operational system for emergency response, it is necessary to
perform a thorough assessment of the political economy of a state to better understand the implications
on programme outcomes.
Contributing to a multi-year ODI study, Slater (2008) sets out a conceptual framework for understanding
the role of cash transfers in social protection. The model identifies three central components which
influence decision making, implementation and impact of the social protection programme:
1) Institutions, politics and governance: The degree to which a cash-based social protection system
is successful within a given context is heavily influenced by extant anti-poverty policies and potential
institutional barriers (Slater, 2008; Lavers & Hickey, 2015).
2) Capacity and implementation: Outcomes are dependent upon the availability of resources, as well
as technical and infrastructural capacity among both government and donors. Weakened physical or
financial infrastructure, including banking systems, transportation and security mechanisms, may impact
the feasibility of programme implementation. The manner in which humanitarian and development
programmes finance shock-responsive social protection may also influence overall programme outcomes
(OPM, 2016). In some instances, a state may not be able to deliver long-term social protection because it
does not control parts of a country where services are needed or because it is unwillingness to do so (ODI,
2007), however because this study only covers intermediate and advanced contexts where there is an
existing state-led social protection programme, these instances will not be discussed in further detail.
3) Local economic and social impacts: Effective programming will assess the impact on local
markets, consumption, and competition while also addressing potential implications of dependency.
While there is limited evidence on the impact of cash-based social protection on social cohesion, a
majority of studies indicate that such programmes may be effective in building positive citizen-state
relations through promotion of state legitimacy and beneficiary voice (Browne, 2013). A weak and
inequitable targeting system however, may increase competition and social tensions among those people
who are deemed ineligible for benefits. In these instances cash transfers may actually undermine citizen
cohesion (Holmes, 2009).
In addition to the potential socio-political factors aforementioned, there are additional challenges, which
often emerge when implementing shock-resistant social protection. Some researchers (Stoddard & Harmer,
2005), caution that linking humanitarian assistance with state-led social protection may compromise the
independence and neutrality of humanitarian aid and even jeopardize the safety of humanitarian personnel
(OPM, 2015). NGOs and humanitarian actors who engage in shock-responsive social protection are required

33
to acknowledge and adjust to the parameter that the system is largely managed by the state (Barrientos &
Hulme, 2010). Humanitarian principles are based on the premise that assistance must be given to all on the
basis of need alone (The Sphere Project, 2011). Should the most effective and appropriate form of
emergency response be cash-based social protection, humanitarian actors may need to adapt in order to
ensure emergency aid is delivered to the most vulnerable (OPM, 2015).
Political economy and market factors must be considered prior to adopting a cash-based shock-responsive
social protection system, acknowledging that in particular contexts, an alternate form of social protection
or emergency response may be more appropriate. A careful assessment of the three central components,
1.) institutions, politics and governance, 2.) capacity and implementation and 3.) local economic and social
impacts, may help in predicting the effectiveness and appropriateness of cash-based social protection for
a given context.
3.5. Chapter Summary
With the recognition of increasing global fragility, both in terms of frequency and severity, it has become
necessary to identify a more timely and effective strategy for delivering emergency response. In linking
the thematic areas of humanitarian assistance, development aid and DRM, shock-resistant social
protection is able to break down the technical barriers between operational silos including funding,
targeting of beneficiaries, and lines of accountability. This increased coordination is critical for achieving
a higher level of utility in disaster response programming. Through rapid response, strengthened targeting
and more effective instruments for transferring resources, high-risk countries are capable of achieving
greater resilience in the face of external covariate shocks.
Chapter 2 identified two key reasons explaining why cash-based social protection is an appealing
instrument for achieving greater resilience in risk-prone countries: (i.) improved sectoral coordination and
(ii.) the provision of long-term predictable assistance. This section illustrated the ways in which shock-
responsive programming satisfies these criteria. In contexts where a state-led social protection system is
in place, strategic collaboration between humanitarian and development actors provide four potential
pathways for delivering emergency response (vertical, horizontal, piggy backing and shadow alignment).
By adopting a unified framework which supports an existing state-led social protection system, emergency
response practitioners strengthen the provision of long-term predictable assistance. As a result of cash-
based shock-responsive social protection, the individual benefits from a rapid and reliable transfer and
the economy benefits from local purchases and multiplier effects. Simultaneously, humanitarian actors

34
achieve their mission of saving lives, and development/state actors maintain their ability to provide long-
term predictable assistance to vulnerable populations. Through the model presented in this chapter,
extant social protection systems become scalable and therefore flexible to a changing context, while
communities increase resilience in their ability to recover from shocks. The following chapter will
undertake a case study reflecting shock-responsive social protection in practice, and further illustrate the
link between cash transfers and resilience.

35
4. CASE STUDY: ETHIOPIA’S PSNP
With a population of 99 million (CIA, 2016) Ethiopia stands as
one of most populous countries in Africa, proceeded only by
Nigeria. Maintaining an open border policy for refugees,
Ethiopia is also the largest refugee hosting country in the region
with 736,000 refugees primarily from neighboring South Sudan,
Somalia and Eritrea (SIDA, 2016). Although the nation has
boasted a strong growth rate over the past decade (10.8%
compared with the regional average of 5%), it is starting from a
very low level and thus remains among the world’s poorest
countries. Interventions have helped Ethiopia to curb the
effects of extreme poverty allowing the nation to achieve a
number of Millennium Development Goals (MDGs)7
. The central challenge remains however, of
addressing the root causes of poverty and vulnerability (World Bank, 2016), namely ongoing drought and
disaster risk management.
Today, approximately 42% of GDP is generated through agricultural production, a sector which is highly
susceptible to the effects of climate change and the region’s history of ongoing drought. Only 5% of the
cultivated land is irrigated, soil moisture is rapidly declining and the once predictable pattern of rainfall is now
uncertain (DFID, 2015). These factors are drivers of fragility and have serious implications for national food
security, and the safeguarding of livelihoods among the growing population, particularly for the 85% of those
employed in the sector (Drechsler & Soer, 2016). Drought and famine induced shocks are manifest in
boundless circumstances throughout Ethiopia includingthe destructionof assets, harmful copingmechanisms,
displacement, malnutrition and the outbreak of disease. These outcomes are further exacerbated by a
reduction in the size of landholdings, conflict, governance and capacity issues (Slater & Bhuvanendra, 2013). A
DFID (2012) study suggests that rising fragility is likely to continue over the next 50 years as the climate
becomes increasingly unmanageable with warming temperatures and more erratic rainfall.
In accordance with these findings, substantial levels of international resources are funneled into the
country each year. Between 2001-2010, Ethiopia ranked 4th
among the 20 leading recipient countries
7
Ethiopia has achieved the MDGs for child mortality and water, and has made notable progress in primary education, HIV/AIDS,
and malaria (World Bank, 2016).
Source: created by author
Figure 4.1 Regional map of Ethiopia

36
of emergency humanitarian aid (US$5.3 billion) and 1st among those not categorized as FCS (GHA, 2012).
Significant levels of ongoing humanitarian response are coupled with steady increases in official
development assistance (See Figure 4.2), in addition to further state sponsored contributions8
. In recent
years, the government of Ethiopia (GoE) has adopted a number of innovative mechanisms for building
household, community and national resilience. These advancements intend to reduce the need for annual
humanitarian appeals through environmentally sustainable, low carbon development solutions (DFID,
2015). Among the array of pilot projects, the PSNP, discussed in the following section, emerged as the GoE’s
flagship programme for addressing food insecurity, climate mitigation and disaster risk management.
Figure 4.2 International assistance in Ethiopia
Source: UN OCHA FTS data, World Bank Indicators and (GHA, 2012)
*”Humanitarian funding” includes all reported international humanitarian aid contributions (including NGOs and the Red Cross/Red Crescent Movement,
bilateral aid, in-kind aid, and private donations. (UNOCHA FTS, 2016)
** “Official Development Assistance” is defined as government aid designed to promote the economic development and welfare of developing countries
channeled either bilaterally (donor to recipient) or multilaterally (World Bank and UN) including humanitarian assistance. (OECD, 2016)
4.1. PSNP Background
The 2002 drought in Ethiopia, which forced 13 million people into extreme food poverty, brought
to light a number of shortcomings linked to the existing emergency response system (Slater &
Bhuvanendra, 2013). While lives were being saved in the short-term through the provision of
emergency food aid, the system was failing to stabilize livelihoods which would allow those
8
The GoE pledged more than US$192m in December 2015 for emergency food and non-food needs (SIDA, 2016)
0
2
4
6
8
10
12
Sudan
Palestine
Afghanistan
Ethiopia
Iraq
Pakistan
Haiti
DRC
Somalia
Indonesia
Kenya
SriLanka
Zimbabwe
Lebanon
Uganda
Chad
Jordan
Angola
Burundi
Myanmar
HumanitarianAidExpenditureinUS$bn
Top 20 Recipients of Humanitarian Aid
'01-'10
FCS Non-FCS
0
1
2
3
4
5
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
ValueofInternationalAssistancein$USbn
Humanitarian* and Development Assistance**
Flows to Ethiopia '01-'14*
Net official development assistance received (current
US$)
Humanitarian funding (current US$)

37
impacted to become more resilient to future shocks. As a result of the reactive aid mechanisms,
Ethiopia has now been a recipient to decades of protracted humanitarian assistance in response
to sudden climate-related emergencies, slow onset disasters as well as long-standing crisis. The
duration of emergency relief has been extended, the volume of support required has increased
and the loss of long-term productive assets has remained constant (ibid.).
Following the 2002 drought, the government of Ethiopia (GoE) recognized the need to move
away from cyclical appeals for external humanitarian assistance, which they believed might
encourage dependency, and toward a state-led social protection programme, which could
strengthen livelihoods and their ability to resist shocks. Influenced by these findings, the GoE
established the New Coalition for Food Security with the responsibility of identifying a
transitional pathway from reliance on reactive emergency response to the institutionalization of
protective long-term predictable assistance (ibid.). This radical paradigm shift saw the creation
of the National Food Security Programme, which comprised a number of food security initiatives
including Ethiopia’s flagship PSNP.
The PSNP was introduced in 2005 as Ethiopia’s rural safety net for food insecure households,
providing regular transfers of cash, food, or a combination of both to targeted beneficiaries. Since
its adoption, the programme has increased from 4.5 million beneficiaries in 4 regions (2005) to
7.6 million beneficiaries in 8 regions9 (2012). The current Phase IV of the PSNP (2015-2020)
includes a total budget of US$3.6 billion financed by the GoE and 11 development partners10
(World Bank, 2016), and is now designed to reach 10m individuals11 (World Bank, 2013) making
it the second-largest social protection programme in Sub-Saharan Africa12 (Drechsler & Soer,
9 The Phase IV PSNP covers 8 regions: Afar, Amhara, Dire Dawa, Harari, Oromiya, Southern Nations, Nationalities and Peoples
(SNNP), Somali and Tigray
10 Donors include: UK’s Department for International Development (DFID), Irish Aid, the European Union (EU), Canadian
International Development Agency (CIDA), Swedish International Development Agency (SIDA), the Netherlands, Danish
International Development Agency, US International Development Agency (USAID), UN Children’s Fund, the World Food
Programme (WFO) and the World Bank
11 10m clients include 8.3 million in chronic poverty with the capacity of supporting an additional 1.7m in transitory food
insecurity
12 The largest social protection programme in Sub-Saharan Africa is South Africa’s Child Support Grant, serving 11.9m recipients
in 2015 (Drechsler & Soer, 2016).

38
2016). As beneficiaries graduate from the programme, new clients will be enrolled on a needs
basis in compliance with the targeting system.
4.2. PSNP Contributions
The Ministry of Agriculture’s Programme Implementation Manual (PIM), structures the
programme objectives along 3 levels: policy objectives, the programme goal and the programme
outcomes. Through these objectives, as elaborated in Appendix C, the PSNP provides aid to
chronically food insecure households through long-term predictable assistance, the creation of
productive community assets, and the use of a risk financing mechanism (World Bank, 2013).
Through the PSNP, the GoE offers a long-term predictable provision of cash, food, or a
combination of both, to targeted households identified as chronically food insecure.
Programming generally prioritizes cash as the appropriate form of disbursement, however food
transfers, or a combination of cash and food, are also common in the absence of functioning
markets. Under the PSNP Phase IV (2015), the transfer value increased to 15kg of grain and 4kg
of pulses or the cash equivalent, per household member per month (Drechsler & Soer, 2016).
Prior to the established safety net programme, poor households were driven to sell valuable
assets such as livestock in order to afford food and properly cope with natural disaster induced
stresses. This depletion of household assets impedes productive capacity, threatening
sustainable livelihoods and rendering the vulnerable less able to cope with future shocks. The
theory of change follows that by providing long-term, reliable transfers, beneficiaries are better
able to manage shocks and stresses rather than reverting to harmful coping strategies. The 2013
World Bank case study finds sound evidence supporting the PSNP’s contribution to livelihoods
stabilization and a reduction in food security among beneficiary households (World Bank 2013).
The PSNP builds productive community assets through labor intensive public works which
contribute to rehabilitation of severely degraded areas, strengthened resilience to covariate
shocks, and increased household productivity. Households that contain physically capable adults,
participate in labor-intensive projects for 6 months of the year during the “lean period” between
the time of harvest and planting. Approximately 60% of the PSNP’s public works programmes are

39
in soil and water conservation, while remaining projects focus largely on social service
infrastructure including schools and health clinics. The public works component of the PSNP,
buffers household assets against climate-related shocks while strengthening the development of
community assets, infrastructure and services. Those households, which do not have able-bodied
adults, receive direct (unconditional) transfers for 12 months of the year. Although transfers are
generally unconditional, pregnant and lactating women may have antenatal care and maternal
nutrition co-responsibilities (or soft conditionalities) (Ministry of Agriculture, 2014).
The PSNP is also linked to a complementary national programme, the Household Asset Building
Programme (HABP), which provides credit and agricultural extension services to vulnerable
households (World Bank, 2013). A 2012 United States Agency for International Development
(USAID) policy brief found that the most
significant gains in food security and resilience
were attained by households having access to
both the PSNP and HABP, whereby social
protection is explicitly linked with livelihoods
diversification (USAID, 2012).
The Risk Financing Mechanism (RFM) is
designed to reduce the humanitarian timeline
by rapidly scaling up of the programme through
an extension of support to current PSNP clients
and the addition of new clients with transitory
needs. The PSNP utilizes a Continuum of
Response or risk layering approach (Table 4.1) in
order to merge social protection and emergency
assistance under one comprehensive
framework, decision making structure and
financing plan: chronic poverty is addressed
through the PSNP’s core caseload; high
frequency/low severity droughts are addressed through the woreda (district) contingency
In order for the RFM to function properly, four
preconditions must be met:
 Early Warning: Effective early warning systems
(EWS) must be in place to trigger the need for
emergency response as early as possible. The EWS
routinely collects and analyzes early warning data,
when the EWS triggers the need for emergency
response, the RFM is activated and
contingency/HRD funds are released. The EWS
draws from a number of tools principally including
Livelihoods Early Assessment and Protection
(LEAP) and the Livelihood Impact Analysis Sheet
(LIAS).
 Contingency Plans: An approved plan must be
established so that actors are capable of
responding rapidly after the RFM has been
triggered.
 Contingency Financing: Funding resources should
be ready for disbursement in order to expedite
assistance to beneficiaries
 Institutions and Capacity: institutions and
implementing partners should be equipped with
the capacity to quickly respond when the RFM has
been triggered
Source: (Hobson & Campbell, 2012), (DPPC, 2011)
Box 4.2 Core Elements of the RFMIn order for the
RFM to function properly, four preconditions must be
met:
 Early Warning: Effective early warning systems
(EWS) must be in place to trigger the need for
Box 4.1 Core Elements of the RFM

40
budget, slightly more severe/less frequent droughts are addressed through the federal
contingency budget; and severe/low frequency droughts are addressed through additional
humanitarian appeals13. Decisions regarding which funding source to employ in a given context
requires clear triggers and thresholds which are predefined by the Early Warning System (EWS).
The Continuum of Response is a key feature of the improved RFM (See Box 4.1), which
strengthens current mechanisms for scaling up social protection in response to shocks, thereby
increasing the social protection system’s impact on DRM and resilience.
Table 4.1 Continuum of Response
Funding Source Trigger Where resources are
Used
Implementation
Responsibility
Woreda Contingency Budget
To address exclusion
error identified through
appeals and to address
transitory needs
 Appeals
 Ongoing
(Improved) Early
Warning
Anywhere within
woreda where the
safety net is
implemented
 Woreda Food Security
Desk (WFSD)
Federal Contingency Budget
To address transitory
needs
 Annual Needs
Assessment and
other hotspot
assessments (real
time early warning
data)
In regions where the
safety net is
implemented
 In existing operational
areas – WFSD
 In non-operational
areas – Woreda Early
Warning and Response
Directorate (WEWRD)
and other
humanitarian actors
where appropriate
Ad Hoc Humanitarian Response
To address transitory
needs
 Annual Needs
Assessment and
other hotspot
assessments
Nationwide  All actors with
operational capacity
(WFSD, WEWRD, WFP
and other UN actors,
NGOs, etc.)
Source: (Drechsler & Soer, 2016: p8)
4.3. PSNP Outcomes and Resilience
The PSNP has shown high levels of success in safeguarding millions of beneficiaries from chronic
food poverty, while the 2011 Horn of Africa drought provided substantiating evidence of the
13 Appeals for additional Humanitarian Response funding are known formally as Humanitarian Response Documents (HRD).

41
programme’s ability to rapidly scale up and successfully extend benefits to additional
beneficiaries. According to the World Bank, cited in Drechsler and Soer (2016), “the PSNP
response to the 2011 drought was widely credited with preventing the worst impacts of the
drought, leading to comparatively less severe drought impacts within Ethiopia relative to its
neighboring countries” (2016; 2). This section will assess the outcomes of Ethiopia’s PSNP and its
impact on achieving greater resilience against climate-related shock. Chapter 2 identified two
key elements central to achieving resilience through social protection: 1.) the facilitation of
improved coordination between humanitarian and development sectors and 2.) the provision of
long-term, predictable assistance. These two elements will serve as framework for organizing
programme outcomes and better understanding how the PSNP contributes to strengthened
resilience in contexts at high-risk of natural disaster.
4.3.1. Increased Coordination between humanitarian and development sectors
Although the GoE holds principal
responsibility over current management of
the PSNP, a large body of donors, NGOs
and institutions played an integral role in
the years leading up to the PSNP, and
continue to make substantial contributions
to the successful growth and
implementation of the programme.
Following the 2002 drought, the GoE
established the New Coalition for Food Security, a multi-sector technical working group
comprised of the government, the UN, donors and NGOs, with the objective of “developing a
strategy of targeted interventions that built on current successes with a pragmatic view of scaling
up what was already working on the ground” (WFP, 2010). Through open dialogue among multi-
sectoral actors, including humanitarian and development organizations, the coalition developed
a clear strategy paving the way for the PSNP.
Figure 4.3 WFP beneficiaries and food transfers under the PSNP,
2005 - 2009
Figure 4.1. WFP beneficiaries and food transfers under the PSNP,
2005 - 2009
2005 - 2009
2005 - 2009
2005 - 2009
2005 - 2009
2005 - 2009
2005 - 2009
Source: (WFP, 2010: p339)

42
Beyond providing input for policy formulation, the humanitarian sector has played a role in the
design and implementation of the PNSP. In 2008, the GoE in coordination with the World Food
Programme (WFP), the largest humanitarian agency fighting hunger worldwide (WFP, 2016),
created the Livelihoods Early Assessment and Protection (LEAP) tool. LEAP is an essential
component of the EWS which controls the release of contingency and humanitarian funding.
Through this tool the WFP assists the GoE in estimating food aid beneficiary numbers during the
harvest seasons meher and belg, as well as in developing indices for early response (WFP, 2010).
LEAP then contributes to the EWS by identifying the need for assistance in specific areas and
consequently triggering the release of additional financing (Drechsler & Soer, 2016). Although
much of this funding is allocated toward cash transfers, a portion of PSNP funding is spent on food
transfers which are provided principally by the WFP. Since the launch of the programme in 2005,
the WFP has provided, on average, about 140,800 metric tonnes of food per year (Figure 4.3)
supporting more than 37% of PSNP beneficiaries between the year 2005 and 2009 (WFP, 2010).
The WFP has also been recognized for its work in developing the PIM, particularly through
provision of technical assistance for public works programmes (ibid.). In regards to monitoring
and evaluation, the Regional Auditors General and the investigative area of the Early Warning
and Response Directorate are the channels generally used to monitor potential leakage of
resources, however they also rely on monitoring at all levels provided by the WFP and various
NGOs who are active in woreda and kebele (ward) level projects (World Bank, 2013). Because of
historic humanitarian support for the vulnerable people in Ethiopia prior to the PSNP,
organizations such as Save the Children, Oxfam and the WFP are interested in tracking progress,
identifying opportunities and building on the programme’s success through the provision of
monitoring and evaluation reports (Save the Children, 2008).
Humanitarian organizations have also contributed to the PSNP indirectly through complementary
programming. Between 2008 and 2011, humanitarian agency CARE launched a pilot programme
entitled PSNP Plus in consortium with Catholic Relief Services (CRS), Relief Society of Tigray
(REST), Save the Children UK and the Netherlands Development Organization (SNV), with funding
provided by USAID. The objective of the pilot programme was to complement food and cash
transfers administered through the PSNP with market-oriented support to achieve beneficiary

43
graduation and exit from the programme. Although a time limited pilot programme which
received marginal attention, PSNP Plus provided useful lessons to be mainstreamed into the
larger PSNP (Trousseau & Legesse, 2011). Furthermore, many humanitarian contributions to the
state-led social protection programme are difficult to quantify making its contributions less
apparent. For example, in the WFP’s Revolution: From Food Aid to Food Assistance, authors
Fithanegest, et al. (2010: p 343) assert, “as the only United Nations agency in the PSNP group,
WFP’s intervention has helped to resolve lingering divergences in views among actors, and its
dual engagement in both relief and PSNP programmes has helped to relax some potential
institutional tensions.”
4.3.2. Provision of long-term, predictable assistance
Chapter 2 argues that cash surpasses other forms of emergency response in terms of cost
effectiveness and the ability to reach beneficiaries at a rapid rate (Harvey, 2005). It is capable of
lifting constraints to productive capacity among households, stimulating the local economy
through domestic purchases (Barrientos, et al., 2010), and increasing state legitimacy and state
capacity (McConnell, 2010). Through use of these systematic transfers coupled with public works,
the PSNP provides immediate relief to food insecure households while also building long-term
community assets for the rehabilitation of severely degraded areas, and the strengthening of
household productive capacity for attaining more sustainable livelihoods. This section will
elaborate on the second component of resilience, provision of long-term-predictable assistance,
by assessing the contributions of the PSNP along the spectrum of immediate relief to long-term
development and sustainability.
The PSNP provides regular assistance to households living in chronic food poverty, with the
capacity of scaling up both vertically (through increased transfer values) and horizontally
(through supporting additional clients driven into transitory food insecurity by climate-induced
shocks). Evidence from the 2011 Horn of Africa crisis show that utilization of a cash system
provides a more precipitous delivery of emergency relief, while also reaching a larger number of
effected households. Typically the PSNP contingency budget provides transfers to households in
transitory food insecurity between February and August, however during the 2011 drought it
became clear additional resources would be needed. The RFM was triggered in August and

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