Lack of Aspirations and Poverty Persistence

In this article, Professor Sayantan Ghosal, Professor of Economics, presents results from an on-going study that suggests it is possible to change these psychological factors.

A significant strand of economic research focuses on external constraints that may perpetuate poverty traps, such as inadequate resources, lack of credit or insecure property rights. From this starting point pro-poor policies tend to focus on relaxing external constraints. Largely missing from conventional analyses of poverty traps are the psychological mechanisms through which the experience of poverty forms the beliefs, values, and aspirations of the poor.

Internal Constraints and Poverty Traps

Wilson (1987) documents the ‘social exclusion-lack of aspirations-poverty’ link first observed in urban ghettos in the United States in 1970. For Appadurai (2004) the “capacity to aspire” involves not only setting goals but also knowing how to reach them: the poor may lack the capacity to aspire to “contest and alter the conditions of their own poverty.” Ray (2003) argues that “poverty stifles dreams, or at least the process of attaining dreams.” Bernard et al. (2011) make the point that;

the poor may exhibit the same basic weaknesses and biases as do people from other walks of life, except that in poverty ... the same behaviours ... lead to worse outcomes?

The research cited above has emphasised constraints internal to the person that also perpetuate poverty, for example learned helplessness, pessimistic beliefs and an external locus of control. Unlike external constraints, these internal constraints are endogenous because they adapt to the experience of chronic poverty. Over time, however, they become an independent source of disadvantage for poor persons in their own right.

A conceptual framework

Aspirations failure refers to the condition of a person who does not aspire to escape poverty although poverty is escapable with additional effort that is within their means. Dalton, Ghosal and Mani (2012) supply a theoretical framework that links internal constraints and poverty traps. Their starting point is the assumption that individuals underestimate how their aspirations may evolve over their lifetime as a consequence of their own effort. The rich and poor alike suffer from this bias, but in poverty the same bias leads to worse outcomes.

Why? The poor face a higher degree of downside risk from bad luck in their lives. The greater downside risk lowers their expected benefit of investing effort into any goal: when your child is performing poorly in school, and you are worried about whether the harvest will give enough to eat, you think twice about hiring a remedial teacher. Lower effort, driven by higher risk, increases the odds of low performance and feeds into lower aspiration and achievement in the long run.

Preliminary evidence on the impact of “Dream Building”

On-going fieldwork (funded by the Centre for Competitive Advantage in the Global Economy (CAGE)) documents the impact of ‘Dream Building’ sessions (pioneered by the Durbar Foundation) to empower a marginalised, stigmatised community of sex workers in Kolkata and provides suggestive evidence of the potential impact of interventions in raising their aspirations.

Along with my co-investigators (Anandi Mani and Sanchari Roy (CAGE), Sandip Mitra (ISI Kolkata), Dr. Smarajit Jana (Durbar)), I undertook a smallscale pilot study of the project between February and July 2011. A sample of 34 sex workers was randomly selected and interviewed for the study in the localities of Khidirpore and Kalighat. For comparison, eight other sex workers who had not been exposed to the workshops were interviewed. The pilot focused on outcome variables related to behavioural and psychological measures, such as opinion about oneself, sense of shame (arising from sex work as a profession), feeling of discrimination, locus of control, decision-making, and mobility. It is found that being exposed to the dream-building workshops improves the sense of self-worth in women — it reduces the chances of these women thinking of themselves as being a fallen woman or a sinner by one third. Workshop participants are also significantly (by around 30%) less likely to feel ashamed of their occupation.

Following the workshops, these women are also significantly (by around 30%) more likely to feel discriminated against, which might be reflective of their heightened sense of self-worth. The impact of the workshops across the two localities appears to have been the same for these three outcomes. The intervention also improved these women’s self-confidence and strengthened their belief that their life was under their control and increased their sense of mobility.

When the sample of 34 women who attended the workshops is compared with the eight women who did not, the results are qualitatively similar to those reported in the preceding two paragraphs (comparison of outcomes before and after workshops for the 34 women).

A detailed analysis of the results reported here can be found in Chapter 6, of the CAGE Policy report, “The Design of Pro-Poor Policies”. (Available at www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/events/publiclectures/ policymay2013/6.chapter_six.pdf).

Conclusion

The pilot study I have discussed above has been extended to include a scaled up piece of fieldwork (with nearly 600 participants) to assess the impact of ‘Dream Building’ on the beliefs and choices of participants. The scaled-up study will aim to provide further robust evidence for the link between raising aspirations and improved outcomes. By combining such evidence with psychologically grounded models of decision-making and social interaction, it is anticipated that the costs and benefits of interventions such as ‘Dream Building’ will be calculated. Pro-poor policies that take into account the need to alter internal constraints among the poor, such as raising their aspirations, will have a greater impact on poverty alleviation than policies that address external constraints alone.

References:

Appadurai, A (2004), 'The Capacity to Aspire', in Culture and Public Action, Edited by Rao, V and Walton, M, Washington, DC: World Bank. Dalton, P, Ghosal, S and Mani, A (2012)

'Poverty and Aspirations Failure', CAGE Working Paper No 22. University of Warwick. Ray, D (2003)

'Aspirations, Poverty and Economic Change', in Understanding Poverty, edited by Banerjee, A V, Benabou, R and Mookherjee, D Oxford: Oxford University Press. Wilson, W J (1987)

The Truly Disadvantaged. Chicago: University of Chicago Press.