Anticipatory action (AA) – sometimes referred to as forecast-based financing (FbF) – uses credible forecasts to trigger the delivery of assistance to vulnerable households ahead of shock peaks. AA is an innovative approach to humanitarian assistance that may mitigate the negative impacts of severe climate shocks. WFP started its AA work in 2015 and gradually scaled up its operations to cover 3.2 million people across 28 countries in 2022.
Despite its growing use, there are still evidence gaps related to the causal impacts of AA. Generating more robust evidence on AA is crucial for understanding any trade-offs between the speed of assistance and the precision of targeting; acting early may not reach the most affected if forecasts are inaccurate. To navigate these trade-offs, judge the cost-effectiveness of AA and further improve humanitarian actions, rigorous evidence is needed on which outcomes are affected, specifically when shock response is delivered as quickly as possible, and how these impacts compare with other standard post-shock responses.
The key objective of this impact evaluation in Nepal was to produce rigorous evidence to understand the impact of initiating anticipatory humanitarian assistance around a severe flooding event on food security, coping, psychological well-being, and livelihood outcomes. The impact evaluation was designed as a cluster randomized controlled trial (RCT), comparing recipients of AA cash transfers with a group receiving regular post-shock cash assistance. During the 2022 monsoon season, WFP Nepal was prepared to support 12,500 vulnerable households (selected based on a prior vulnerability assessment) in response to potential severe flooding across the Karnali basin (Kailali and Bardiya districts), near the border with India. The support consisted of earlywarning messages and unconditional one-off cash-in-hand transfers. The response was coordinated by the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) and funded by the United Nations Central Emergency Response Fund (UN CERF).
Key findings
The results for this study suggest there is a benefit to delivering anticipatory cash transfers. Households receiving transfers in the immediate aftermath of the flood consumed more food (especially animal proteins), avoided food insecurity and showed better mental health. For example, the food consumption score (FCS, an indicator to measure food security) was 2.88 points (or 6 percent) higher in the AA group compared with the post-shock group, and AA transfers decreased the PHQ-4 score (mental health) by 0.10 standard deviations (or about 3 percent) when measured in the first round. Moreover, AA group households were less likely to engage in negative coping strategies, as 19 percent fewer households relied on less preferred food and 25 percent fewer households borrowed food from others compared with postshock households.
These initial gains tended to dissipate in the medium term when compared with the standard post-shock response group. Second and third round results showed that the post-shock group no longer lagged on important consumption outcomes after receiving the transfer as well. The effects on the psychological wellbeing of the AA recipients were positive but smaller in the second than in the first round, after both groups received the same sized transfer. There was an overall net benefit for the AA group in the form of better food security, fewer negative coping strategies and better psychological well-being, which stemmed from acting early. During the medium-term recovery period, the AA group achieved similar or better outcomes than the post-shock group, even though – at this point – the post-shock group had received support more recently.
