Donations for Refugee Crisis: In-kind Versus Cash Assistance

Humanitarian organizations (HOs) have, for decades, helped their beneficiaries through in-kind assistance (e.g. food and hygiene items). Recently, cash assistance (e.g. money and vouchers) has gained remarkable traction as an effective type of assistance because it makes beneficiaries feel empowered and helps local economies as well. To avoid potential price inflation, however, HOs have implemented cash assistance mostly in competitive markets. An unresolved challenge facing HOs is to provide cash assistance to their beneficiaries when local retailers have market power. This is a very relevant issue because there are many communities, such as rural Greek towns, which not only host humanitarian beneficiaries, but also deal with local market power. This presentation proposes an innovative and implementable policy which aligns the incentives of the retailer and the HO-government partnership.

Authors:  Telesilla Kotsi, The Ohio State University; Owen Wu, Indiana University; and Alfonso Pedraza-Martinez, Indiana University


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