Cash transfer (DFID paper) effects

The effects of cash transfer involve both economic and social factors that interplay to impact poverty, inequality and overall wellbeing. Cash transfers involve providing monetary assistance to individuals, families and communities, usually in the form of cash. Such assistance can supplement existing income, improve household access to essential goods and services, and alleviate poverty and inequality. Economic Effects: Cash transfers can have various positive economic effects. First, they can help recipients to increase their income, thus allowing them to purchase goods and services that they otherwise would not have been able to afford. For example, cash transfers can enable households to buy food, pay for medical care, purchase materials for schooling, or save and invest for the future. Cash transfers can also have indirect economic benefits, such as helping to reduce poverty and encouraging the circulation of money within the local economy. Social Effects: Cash transfers can have a direct impact on social wellbeing. This includes helping households escape from poverty; reducing inequality; improving access to education, health services and other basic needs; and providing households with greater autonomy of choice. Additionally, cash transfers have the potential to improve recipient’s perceptions of their personal economic security, which can help reduce stigma and discrimination related to poverty. Finally, cash transfers can shape how people view the state and how they interact with it. For example, by providing cash transfers, governments can reaffirm citizens’ trust in the government and its policies.