Cash-based response in relief: the impact for humanitarian logistics

The purpose of this paper is to evaluate the financial and material flows in cash-based responses (CBRs) and their implications for humanitarian operations. This research proposes to view cash as a commodity used by humanitarian actors in emergency operations and therefore aims to explore how CBRs impact on humanitarian logistics and ultimately, affect beneficiaries.

The methodological approach of grounded theory was chosen for this inquiry because it allowed the researchers to generate a general explanation for the process of CBRs in emergency situations based on the views of participants interviewed. Interviews were conducted with senior managers, supply chain managements and logistics officers from international humanitarian organisations (HOs), United Nations agencies and commercial organisations involved in humanitarian operations. Examples of topics covered during the field work included, procedures and policy; knowledge and information management; systems and technology; actors and agents.

The impact of CBRs on humanitarian operations can though not be understated. They alter supply chain design, the very role of beneficiaries as well as HOs, and change the strategy of aid delivery from push to pull. Perhaps, the most important factor is the elimination of many logistical activities that needed to be performed by HOs. Delivering cash diminishes the needs for lengthy procurement and assessment processes, pre-positioning, transportation and distribution. This bears the potential of significant reductions in costs for delivering humanitarian aid at the same time as it is an important move from aid to trade.

The challenge for humanitarian agencies in the coming years is to overcome their fears surrounding CBRs, and to implement cash programmes where they are judged to be the most appropriate response. This will require not only a change in donor policies, but also a fundamental change in the skill set of humanitarian logisticians, who are used to identifying needs and providing commodities and thus to maintaining control over the provision of assistance.

The contribution of this research is twofold: this is the first examination of cash-based interventions in humanitarian operations through the prism of supply chain management. Second, the research is field based and grounded in empirical observations thus adding to the literature and offering insights to practice.