Cash aid to households is most effective in reducing insurgency threats, Stanford research shows

Stanford researcher Joseph Felter found that direct cash assistance to households in the Philippines decreased insurgent-led conflicts and weakened their influence in those villages.

Filipinos waving national flag

Poor Filipino villagers who receive cash grants from the government are less likely to fall under the influence of insurgents, Stanford researcher Joe Felter shows in a new study.

How people receive aid in countries wracked by civil wars can have a major impact on both the level of insurgent violence and insurgents’ influence in those communities, new Stanford research shows.

In the case of the Philippines, the study found that the type of aid provided by the government and how it is administered can be a major factor in reducing insurgent violence against civilians and government security forces.

“Visibility in aid matters,” said Joseph Felter, a senior research scholar at Stanford’s Center for International Security and Cooperation, who co-authored the study. “The higher profile the aid is, the more the insurgents are likely to anticipate its ability to undermine their position relative to the government and take actions to sabotage it. When money is wired to the bank account of a family household, insurgents are less likely to know about it and are constrained in their capacity to respond.”

Since the end of World War II, more than half of all countries in the world have experienced civil strife – wars within their own borders – leading to the deaths of more than 16 million people, as well as lower levels of economic growth than in more stable countries, according to Felter and his colleagues.

As a result, the global community has provided significant financial aid through the years to countries facing insurgency and civil wars. Still, the question remains: what is the best form of aid, and how should it be delivered to better reduce the violence associated with civil conflicts?

Felter noted that aid can take several forms, ranging from specific cash payments to households to money funneled more generally and visibly to communities through infrastructure projects such as bridges, roads and clinics. The latter tend to attract attention from insurgents.

In this case, Felter and his fellow researchers examined the effect of cash payments to Filipino households – a type of aid known as a “conditional cash-transfer” program that took place from 2009 to 2011. This program distributed cash payments in the range of $200 to $370 to poor households. In the Philippines, it is known as Pantawid Pamilya.

Over the past decade, the program became one of the most common ways for the Filipino government to fight poverty and insurgency at the same time. The country faces a few different major internal threats, including rebels associated with a Maoist Communist insurgency in rural areas and Islamic groups in the southwestern provinces.

Felter’s study involved 130 villages in the Philippines and used data from the World Bank and the Philippines government and military. “Conflict” is defined as violent incidents associated with insurgents in a given village. “Influence” is defined as insurgent activities such as coerced taxation and rent demands.

Key findings

The findings revealed that the cash-transfer program led to a substantial decrease in conflict incidents for villages that received aid. Villages receiving aid from the program experienced over 50 percent fewer conflict episodes than villages in the control group that did not receive this aid.

Felter also found evidence that villages receiving those payments experienced a decrease in insurgent influence compared with control villages, suggesting that the program weakened rebel presence. The villages that received aid saw nearly a one-third reduction in insurgent influence. 

“Our research suggests that the effects of cash-transfer programs on civil conflict differ from other types of aid interventions based on the type of aid provided and how it is implemented,” Felter said. The fact that the Pantawid Pamilya helped reduce the presence and influence of rebel groups in the targeted villages is especially important as well, he added.

Felter explained that it is critical for government assistance programs to not only reduce violence but also to weaken insurgent influence over villages, as these groups can still undermine the rule of law and oppress citizens without resorting to armed violence.

Exacerbating conflict

Felter said this research suggests that cash aid directly to households carries less risk and may be more effective than other types of high-profile aid interventions, such as community-driven development, rural employment projects, clinics, roads, bridges and food aid.

In fact, Felter said, prior research has shown the more highly visible types of aid may actually exacerbate conflict. In these cases, insurgents attack and derail these economic assistance efforts because they believe this form of aid will boost people’s support for the Filipino government.

Felter co-wrote the journal article, “Conditional cash transfers, civil conflict and insurgent influence: Experimental evidence from the Philippines,” which appeared in the Journal of Development Economics. His co-authors included Benjamin Crost, an economist at the University of Urbana-Champaign, and Patrick B. Johnston, a political scientist with Rand Corp.

Media Contacts

Joseph Felter, Freeman Spogli Institute for International Studies: (650) 723-9866, joseph.felter@stanford.edu
Clifton B. Parker, Stanford News Service: (650) 725-0224, cbparker@stanford.edu