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Should the U.S. give cash or food to the Philippines?

- November 18, 2013

This is a guest post from Lauren Prather, a PhD candidate in Stanford University’s Department of Political Science.

— Erik Voeten

Typhoon Haiyan slammed into the Philippines on Nov. 7, wreaking havoc and leaving thousands in need of humanitarian assistance such as food aid. Americans usually want to help in such situations, but the form that assistance takes can vary. Does the American public prefer giving cash or giving food to the needy in other countries? The answer could depend on agricultural interests in the United States: People from food-producing states may prefer giving food to giving cash.
Traditionally, much of the food aid provided by the U.S. government is procured in the United States and shipped abroad. The Obama administration initiated reforms that would relax these requirements and include more flexible approaches to food aid provision, including giving cash or vouchers to people in poor countries to help them buy food locally. The Philippine disaster has brought the political wrangling over reforming food aid into sharp relief.
These changes are part of a broader conversation in development circles and the media about the merits of giving unconditional cash transfers to the poor in developing countries. Researchers studying cash transfers argue that giving cash is more efficient and could be more effective. Food aid in particular is expensive and can damage local economies by undercutting local farmers. Giving people cash, on the other hand, allows them to buy food locally, which can be more cost-effective for donors and can support local agriculture.
What are the political constraints to including cash transfers to the poor? As I have written elsewhere, we could start by looking at the domestic welfare system. Studies suggest that Americans oppose cash aid to the domestic poor, especially cash aid with few strings attached. Scholars argue that this preference is associated with the racialization of domestic welfare programs and negative stereotypes about welfare recipients. But do Americans also oppose cash transfers to the foreign poor?
To shed light on these questions, I used a randomized experiment embedded in a survey fielded in July to a representative sample of 1,000 Americans. In the survey, I gave individuals a fictional news article that described a government hunger relief program. The article contained two experimental treatments. In the first treatment, I randomly told half of the survey respondents that the program gave the poor cash, while the other half read that the poor were given food. The second treatment was randomized independently of the first treatment: Half the respondents were told that the program helped Americans and the other half read that it helped people living in other countries. After reading the article, survey respondents were asked whether they thought the government should cut the program.
The results were surprising. Among those who read about the foreign hunger relief program, the cash treatment had little effect: 45 percent of respondents thought government officials should not cut the program giving food, while a similar 43 percent thought officials should not cut the cash program. For those who read about the domestic program, however, the results support our theories: 72 percent of respondents wanted to keep the program that gave food, whereas only 58 percent wanted to keep the program that gave cash.
Graph by Lauren Prather
Although these findings suggest that on average Americans do not distinguish between in-kind aid and cash aid when thinking about international assistance programs, the public’s preferences may not be uniform. For example, individuals from productive agricultural states may prefer food aid to cash aid because they stand to gain from in-kind food aid policies.
This is what I found when I looked at individuals in my survey from California and Texas, two of the most agriculturally productive states and two states making large amounts of agricultural contributions to lawmakers. Among Californians and Texans who read about the foreign hunger relief program, 56 percent wanted to keep the food program, but only 36 percent wanted to keep the cash program.

Graph by Lauren Prather

Graph by Lauren Prather

From these results we can draw a few important conclusions. First, it appears that when it comes to domestic anti-poverty policies in the United States, Americans have a strong preference for food aid over cash aid. Second, this preference for giving in-kind aid instead of cash aid does not translate to the foreign context. Finally, my study suggests that segments of the population with a stake in the way food aid is distributed may have preferences that differ from those of the general public. Opposition in these states and the efforts of the agricultural lobby on their behalf could prove to be stubborn obstacles to U.S. food aid reform.