Revolutionizing Disaster Aid: Cash Payments and Humanitarian Impact Bonds

Aid agencies are experimenting with a new approach to disaster relief by providing small cash payments to people just before a disaster strikes, rather than waiting until afterward. These anticipatory cash relief programs aim to help the world's poorest protect themselves and their property in the face of increasingly severe climate change-induced disasters. Early evidence suggests that these cash payments can empower individuals to make choices that improve their resilience, such as buying food, paying off loans, or investing in assets. However, skeptics argue that cash relief is not a sustainable solution to the multitude of hazards faced by the poor in the global South.