Iraq’s Universal Public Distribution System: Utilization and Impacts During Displacement

Subsidized or free distribution of food has been a central pillar of social protection programs in many countries. With the number of forcibly displaced persons at record levels, the question arises of whether in-kind food transfer programs are effective in mitigating the loss of welfare induced by forced displacement. This paper examines whether Iraq’s Public Distribution System, a universal food subsidy program, has buffered the impacts of displacement on households. Using propensity score matching to account for the observable differences between Public Distribution System recipients and non-recipients, the analysis finds that displaced households with continued access to Public Distribution System benefits have higher food and non-food expenditures compared with displaced households that lost access. Likewise, the beneficiaries have higher calorie intakes and are less vulnerable to falling into poverty. However, displaced beneficiaries remained significantly worse off and more vulnerable to poverty than non-displaced households, suggesting that, although the Public Distribution System helped mitigate displacement to a degree, it may not be the most effective protection program for such shocks. Given the considerable resources the universal program consumes, it is vital to think of alternative approaches, such as targeted cash transfers, that might be more effective in protection and cost.