This article examines how cash versus in-kind transfers affect local economies. I exploit the progressive nationwide rollout of the Ethiopia’s Productive Safety Net Program (PSNP), Africa’s largest social protection program, to analyze the impact of the policy on local prices and market adjustments from 2001-2015 using a staggered difference-in-differences approach. Cash transfers increase local prices by 5%, while in-kind transfers show no significant average price effects. The difference hinges on local market conditions: cash works best where markets are integrated, and agricultural productivity is high, but in-kind transfers outperform cash in remote, low-productivity areas with weak market access. These effects are proportional to the intensity of the treatment. A one percentage point increase in transfer share in district expenditure drives a 1.02% price increase in cash-dominant districts versus a 0.82% decrease in food-dominant districts. While the price increase yields large productivity gains, it has negative effects on child well-being: children under five exhibit higher rates of underweight and wasting in cash-dominant districts. These findings highlight the importance of tailoring social protection program design to local market conditions and considering transfer modality effects when scaling up interventions.