What can go wrong with a Forecast-based Financing project?
Achieving great things
The goal of Forecast-based Financing is to reduce the impact of disasters.
In the precious window of time between a forecast and a potential disaster, FbF releases resources to take early action. Ultimately, we hope this early action will be more effective at reducing suffering, compared to waiting until the disaster happens and then doing only disaster response. For example, in Bangladesh, people who received a forecast-based cash transfer were less malnourished during a flood in 2017.
With the promise of increased effectiveness, the concept of FbF is rapidly gaining traction in the humanitarian and development sectors. Clearly, FbF can be a saving grace for people who would otherwise experience a catastrophe.
However…what could possibly go wrong?
FbF doesn’t inherently have a higher chance of “going wrong” than much of our other work. But because it is new, people might not realize potential pitfalls.
Here we outline several ways in which FbF can go wrong – some are inevitable, and some can be avoided.
Let’s create a fake country – let’s call it Madeupsville.
In Madeupsville, FbF has taken off, and is widely implemented by everyone. However, in Madeupsville, people are starting to run into a few problems…