The Multiplier Effect of Cash Programs in Lebanon

Introduction:

This study calculates the multiplier effect of multi-purpose cash assistance (MPCA) and Cash Plus programs by Mercy Corps and three partner organizations – Action Against Hunger (ACF), Save the Children, and WeWorld – in the Lebanese districts of Akkar and Baalbek. Using data collected in August 2025, it estimates the amount of additional economic activity generated by injecting cash into local economies in those districts between May and July 2025.

Cash assistance is a crucial aid modality in supporting Lebanon’s most vulnerable populations. By measuring the effects it produces, aid providers can better quantify and potentially optimize their positive impact. The multiplier effect is an informative and easy-to-interpret quantitative indicator that measures the value of additional economic activity generated by an intervention. The indicator is the ratio of the value of the intervention plus the additional economic activity generated by the intervention, divided by the value of the intervention: it is typically presented as “every dollar of input generates X dollars of total economic activity”. The multiplier effect of humanitarian cash programming has been calculated in several contexts worldwide, with the Cash Consortium of Yemen (CCY) producing the most recent example from the region. That study found that every US dollar (USD) of MPCA generated USD 2.29 and USD 2.56 of economic activity in two subdistricts where cash assistance was distributed.

Key Findings:

• The economic impact of cash assistance is measured using the multiplier effect, which serves as a useful indicator to measure the value for money of cash programming.
• In the four areas where cash programs were implemented, one dollar of cash assistance generated between USD 1.05 and USD 1.37 of economic activity when defining the local economy across a smaller area, and between USD 1.13 and USD 1.46 when defining the local economy across a larger area.
• The multiplier effect did not significantly vary by cash modality in studied areas.
• The multiplier effect was significantly reduced when households spent money on food outside the local economy, as food traders made most of their business-related purchases externally. This highlights the need to strengthen local value chains – especially food processing – alongside cash assistance programs to build economic self-reliance and maximize the broader economic impact of cash assistance.