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Do disaster-relief cash transfers trap people in risky areas, or help them adapt?
Disaster relief can discourage people from adapting to future disasters – for example, by reducing incentives to relocate. But in low-income settings, cash relief can also ease liquidity constraints and enable adaptation. Evidence from Pakistan’s 2010 floods shows that both of these forces exist but that they offset each other, so that cash relief does not cause more people to stay in disaster-prone areas.