Question

1. What is in-kind aid? Why might in-kind aid be less efficient than cash? What are some of the reasons that in-kind aid might be better than cash?

Answer 1

It is a kind of donation or charitable act that instead of providing with money goods and services are given. Does the benefit of an in-kind donation to one family really outweigh the value of helping twice or even ten times as many households? For a growing number of antipoverty programs, the answer to that question appears to be no. New research suggests that cash grants to the poor are as good as or better than many traditional forms of aid when it comes to reducing poverty. The process of transferring cash, moreover, is only getting cheaper, thanks to the spread of technologies such as cell phones and satellite signals. And simply asking whether a given program is doing more good than it costs puts pressure on the aid sector to be more transparent and accountable. It’s well past time, then, for donors to stop thinking of unconditional cash payments as an oddball policy and start seeing them for what they are: one of the most sensible tools of poverty alleviation.

Reasons why in-kind aid may be more useful than cash is that the money can be laundered for other needs or personal benifits. In kind aid makes sure the goods and services are provided to rhe needy and cash is not used for other selfish reasons.