Can cash and therapy work in conflict settings? Evidence from Ethiopia
In low-income settings, poverty and mental health are often locked in a vicious cycle.
- Ethiopia
- social protection
- therapy
- mental health
By Melissa Hidrobo, Harold Alderman, Negussie Deyessa, Daniel Gilligan, Parthu Kalva, Jessica Leight, Michael Mulford, and Heleene TambetMay 27, 2026
Key takeaways
• A randomized evaluation of a cash and psychological intervention in Ethiopia shows that offering both elements together in conflict settings improves mental health and economic outcomes.
• Cash improves economic outcomes significantly but has little lasting impact on mental health.
• Conflict weakens intervention effectiveness substantially, reducing gains—especially for mental health.
Republished with permission from VoxDev.
In low-income settings, poverty and mental health are often locked in a vicious cycle. Poor mental health can impair decision-making and reduce productivity, while the stresses of poverty—financial insecurity, food shortages, and environmental hazards—further exacerbate mental illness (Ridley et al 2020). Armed conflict can intensify this cycle: violence and displacement amplify trauma, while the resulting loss of human capital, assets, and jobs pushes households deeper into poverty.
We investigate whether combining psychological support with economic assistance can break this cycle, and how the effectiveness of these interventions shifts in a context of conflict.