Anticipatory Cash Transfers in Climate Disaster Response

This working paper assesses the impact of WFP cash transfers by comparing households facing extreme floods in Bangladesh in 2020 that received a one-off anticipatory cash transfer to comparable households that did not.

Anticipatory cash transfers were found to improve welfare across all three considerations and to help smooth negative income shocks caused by disruption to income generating activities and erasure of private assets. Households receiving the cash transfer were 36 per cent less likely to go a day without eating compared to households that did not receive the transfer. Transfers also made households more likely to take preemptive action, like evacuation (12 per cent) or evacuation of livestock (17 per cent), and better able to avoid costly borrowing. Timing is also analyzed; impacts of the transfer were still present three months later, with children (4 per cent) and adults (7 per cent) more likely to have more robust food consumption. Earlier cash transfers are also more effective, even considering that all transfers occurred before traditional humanitarian aid.

This working paper was first published by the Centre for Disaster Protection.