Economics of Resilience: An Ounce of Prevention, a Pound of Cure (After-Event Resources)

A recent study commissioned by USAID’s Center for Resilience demonstrates that investing in resilience and a more proactive response to avert humanitarian crises in the Horn of Africa could reduce the cost to international donors by 30 percent, while also protecting billions of dollars of income and assets for households and communities impacted by droughts.

On January 25th, international development economists Courtenay Cabot Venton and Mark Lawrence and resilience M&E and strategic analytics advisor Tiffany Griffin shared results from a recent cost-benefit analysis. The analysis estimates that, over a 15-year period, every $1 invested in resilience will result in $3 or more in reduced humanitarian assistance needs and avoided losses.

The study compared a range of investment and response scenarios in Kenya, Ethiopia, and Somalia and demonstrates that early humanitarian response, safety nets, and investments in resilience are far more cost-effective than responding after households are engaging in negative coping strategies and prices are destabilized. The study builds on groundbreaking work commissioned by DFID in 2013 on the Economics of Early Response and Resilience.