SPACE (2021) How disaster risk finance can link with social protection? maximising the effectiveness of shock response

This paper is an output of SPACE, a joint initiative of FCDO’s Better Assistance in Crises (BASIC) and Gender Responsive Social Protection (GSP) programmes (funded by UKAid); GIZ (funded by the German Federal Ministry for Economic Cooperation and Development); and the Australian Government through the Department of Foreign Affairs and Trade (DFAT). SPACE materials do not necessarily represent FCDO, or GIZ or DFAT’s own views or policies or commit FCDO, GIZ or DFAT to any particular course of action.

Abstract

Disaster Risk Finance (DRF) focuses on arranging finance in advance so that appropriate levels of funds will reliably get to the people who need it most, when they need it. Whilst the financial instrument to be used is important (e.g. insurance, contingent credit or contingency budgets to name a few options), it is also critical to think through how to get the money efficiently and effectively to affected communities. For this reason, DRF is best when it is linked to a pre-agreed plan of how the money should be spent. Because of this, those working in DRF are increasingly considering Social Protection as a means to distribute emergency support, sometimes called ‘Shock-Responsive Social Protection’ (SRSP). This brief provides some initial guidance for those wanting to deepen their understanding of SRSP from a financing perspective; it is suitable for those involved in the design or funding of DRF instruments and approaches, who want to explore options of how to increase its impact and cost-effectiveness, for example through improved contingency planning. Given spiralling needs and the rising frequency and severity of climate disasters, it is imperative to make sure that every dollar of DRF support has the maximum possible impact on the lives of vulnerable people. SRSP offers some potential to help realise that aim.

Scott, Z. (2021) 'How disaster risk finance can link with social protection: maximising the effectiveness of shock response’, Social Protection Approaches to COVID-19 Expert Advice Service (SPACE), DAI Global UK Ltd, United Kingdom

This document was developed alongside others in the SPACE series (all available here).