The economic and psychological effects of cash transfers in development cooperation

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.