Cash Versus In-Kind Transfers: Comparative Differences and Individual Best Practices to Benefit Recipient Communities
Impact on Markets
Business Administration, Management, and Operations
Business Law, Public Responsibility, and Ethics
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AbstractThis research paper seeks to compare cash and in-kind transfers in the context of foreign poverty aid to determine which transfer style is most beneficial and to evaluate long-term best practices of each kind to more positively benefit the recipient communities. It does this by comparing arguments for and against each transfer model. The first argument discusses the differences in distribution costs between the two models. The second compares the cash transfer’s strong concept of choice with in-kind transfer’s typical style of controlled consumption of goods. The second argument discusses the timing and impact of targeting communities in connection to each transfer style. Finally, the last argument discusses the contrasting macroeconomic impact each style has on local markets. Cash transfers are predetermined cash donations given either as a lump sum or in periodic transfers. Conversely, in-kind transfers are direct transfers of physical goods distributed to households. This paper maintains that both transfer styles have the capability of being beneficial if they are planned and executed with extensive knowledge of the unique local community, its needs, the economic and social effects of each transfer style, and a purposeful design aimed at long-term growth and empowerment of communities.