Cash Before Calamity: Anticipatory Action for Flood Resilience

In the low-lying plains of northern Bangladesh where the Jamuna River weaves through the landscape like arteries, the annual monsoon is a high-stakes gamble. Between June and September every year, water levels rise and fall over the period of days or even weeks. In an average year, the monsoon brings many opportunities to households who are well-adapted to this seasonal rhythm. However, in a bad year, extreme flooding can devastate lives and livelihoods. As climate change intensifies rainfall and accelerates Himalayan glacial melt, the odds of a bad year have increased.

Bangladesh is currently confronting one of these bad years, with more than two million people affected by extreme flooding since early July. In the past, humanitarian support would only reach badly affected households weeks, if not months, after the floods. The system was inherently reactive: it takes time to assess the level of need, identify who needs support the most, and mobilize funding.

The response this year is different. Rather than reacting to a crisis after it occurs, anticipatory action was implemented before the shock materialized. Forecast-based triggers were activated five days before water levels reached their peak and the World Food Programme (WFP) delivered anticipatory cash transfers to vulnerable households via mobile money before the forecasted flood peak. Other UN agencies – FAO, UNICEF, and UNFPA – also delivered other forms of anticipatory support. Finance was pre-arranged through the UN Central Emergency Response Fund (CERF). A detailed action plan laid out the interventions to be taken once triggers were activated. Vulnerable households were pre-identified on a registry. Decision rules about when and where to act were defined using forecasts based on local and global flood models.

As a result, cash transfers were delivered approximately three months earlier than a similar humanitarian response in 2019 – and likely with much greater impact that the traditional response. The use of pre-arranged financing and data-driven triggers eliminates the delay associated with fundraising based on demonstrated need. It also reduces substantial uncertainty for implementation partners and ultimately recipients.

Anticipatory action was first piloted at scale in Bangladesh in July 2020. Our study evaluating the impact of this pilot shows that speed is crucial, highlighting why anticipatory action is more effective than traditional responses to extreme weather events like floods.

In 2020, the WFP used a two-stage trigger based on forecasts of upstream water flow to send 4,500 Bangladeshi taka (equivalent to two weeks of household food expenditure) via mobile money to over 23,000 ultra-poor households (see Figure 1). The first trigger activated preparations 10 days before a predicted 1-in-5-year event. The second released cash transfers from the UN CERF to affected households five days before the flood peak. The floods that followed were some of the most severe and protracted in decades, lasting for over a month on average.

Figure 1. Timeline of triggers and cash transfers relative to water flow

We evaluated the impact of anticipatory action on household welfare by comparing recipients of the anticipatory cash transfer to otherwise comparable households who did not receive any funds. Both treated and control households were sampled from the same pre-existing lists of vulnerable households. Treated households had access to a specific digital wallet – a bKash account – at the time of verification, while control households had inactive bKash accounts or different wallets. This selection method arose from organizational constraints limiting the humanitarian partner to using only bKash for cash transfers, despite the widespread use of digital wallets in the area. Ten to twelve weeks after the intervention, we conducted a phone survey of over 9,000 households to assess impact.

What did we find? Anticipatory action made vulnerable households better off, both during the floods and three months after the intervention and floods had dissipated. Compared to households who did not receive any cash, recipients of anticipatory cash transfers reported that:

• They were 52 percent less likely to go a full day without eating during the floods.

• Their children were 3.8 percent more likely to consume enough food (three meals or more) three months later, which is striking in light of the long-term consequences of temporary child undernutrition.

• They had 18.7 percent higher life satisfaction.

• They faced a reduction in the loss and damage of livestock, household assets, and crops.

• Their earnings potential was higher three months later – an early sign of recovery. Recipient households were 7.8 percent more likely to report avoiding crop loss or being able to replant, and 5 percent more likely to work for a wage at the time of the survey.

Why do we see these improvements three months after the floods? We show that the anticipatory cash transfer increased the choices available to household before the flood peak. Compared to no-cash households, recipient households took more action in preparation for the incoming floods, including evacuating household members and livestock and stocking up on food.

We measured these welfare effects before the usual humanitarian response reached affected households, highlighting the cost of a late response. Although we do not compare the impact of anticipatory cash to post-flood cash transfers, we find that speed of delivery matters, even when acting early. Households that were identified to receive the cash transfer one day earlier relative to the local flood peak experienced a small improvement in adult food consumption three months later.

Our experience in Bangladesh revealed five important takeaways for crisis response:

1. Anticipatory action is more effective than traditional responses in helping vulnerable households navigate extreme weather events like floods. Failing to act early has real welfare costs. The anticipatory cash transfer enabled households to take crucial decisions that mitigated the flood impacts at a critical juncture. While the one-off cash transfer was sizable, the floods were protracted, lasting longer than a month on average. Nevertheless, the benefits of the anticipatory cash transfer were still present across a wide range of outcomes several months later. In the absence of credible early warning systems, the anticipatory cash transfer provided much needed liquidity and information about the severity of the incoming flood.

2. Investing in robust social protection systems enhances the efficiency and impact of anticipatory action. Anticipatory action leverages existing systems and procedures to provide swift support once triggers activate. Scaling up anticipatory action presents an opportunity to strengthen the foundations of social protection systems, including establishing up-to-date targeting and payment delivery systems. The use of digital payment services in the 2020 Bangladesh pilot ensured rapid cash delivery to households. However, payments were delayed by a couple of days due to the need to verify a huge number of households. Building on insights from the initial pilot, WFP and other UN agencies proactively developed an up-to-date registry ahead of this year’s flood season, enabling an even timelier response.  Investing in dynamic targeting methods and new data sources, such as phone data, can further improve the speed and accuracy of support delivery.

3. Investing in weather monitoring services, equipment, and capacity building yields high returns for anticipatory action. Such investments will enable anticipatory action to cover more hazards and countries effectively. High-quality data for triggers is crucial for setting policy-relevant thresholds defining when to act. Bangladesh's success in anticipatory action has been facilitated by its relatively high forecasting accuracy for monsoon flooding. Continued investment in this area can help balance the trade-off between acting quickly for greater impact and waiting for more accurate information to reduce forecasting and targeting errors.

4. Anticipatory action is effective in protecting development gains and serves as an important complement to policies building long-term resilience to climate change. By helping vulnerable households navigate extreme weather events, anticipatory action works synergistically with recovery and rehabilitation efforts that address unmitigated losses and longer-term development initiatives focused on poverty alleviation.

5. This large-scale evaluation of a humanitarian intervention offers valuable insights for measuring the impact of future humanitarian programmes, in a context where the evidence base is slim. Our study showcases how to overcome some of the challenges associated with evaluating humanitarian programming. For example, we leveraged variation created by incomplete targeting due to the use of a single mobile money provider, rather than withholding support. We also collect a large post-intervention survey over the phone to overcome access concerns during a major flood.

While these investments are not trivial, neither are the welfare gains at stake. The success in Bangladesh demonstrates that anticipatory action is a practical and powerful tool for reshaping humanitarian response in the face of climate change, turning foresight into life-saving action. Ranil Dissanayake makes the case for making anticipatory finance a more integral part of our global disaster risk management and adaptation response to climate change. By investing in anticipatory action today, we can build a more responsive, impactful, and humane humanitarian system for tomorrow.