Title: The economic and psychological effects of cash transfers in development cooperation

Authors: Konstantin Muenchau; Augustin Suessmair

Addresses: Leuphana University of Lueneburg, Wilschenbrucher Weg 84, 21335 Lueneburg, Germany ' Leuphana University of Lueneburg, Wilschenbrucher Weg 84, 21335 Lueneburg, Germany

Abstract: Against the backdrop of increasing popularity as an instrument of international development cooperation, our paper examines the economic and psychological effects of cash transfers. At this moment, this paper specifically focuses on the reaction of local markets and the structural conditions for a successful implementation as well as the effects of cash-transfers on their recipients' self-esteem and on the self-actualisation of women in developing countries. While the data was collected via semi-standardised guideline interviews with experts, the interpretation was carried out in accordance with Philipp Mayring's qualitative content analysis. Our study finds that cash transfers seldomly cause inflationary effects while they particularly require functioning markets, existing value chains and fulfilment of governmental support functions for a successful implementation. While the impact of cash transfers on the psychological constructs in question is generally assessed positively by the interviewed experts, several implications and potential psychological downsides are addressed.

Keywords: development cooperation; cash transfer; unconditional cash transfer programs; cash benchmark; impact evaluation; income; poverty alleviation; direct investment; human capital.

DOI: 10.1504/IJEBR.2021.115505

International Journal of Economics and Business Research, 2021 Vol.21 No.4, pp.433 - 457

Received: 21 Aug 2019
Accepted: 19 Jun 2020
Published online: 07 Jun 2021 *

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