For those who don’t know, a great new blog about applied development economics was launched last academic year. Managed by some folks over in Cornell’s Dyson School of Applied Economics and Management the “Economics That Really Matters” blog references Theodore Schultz’s 1979 Nobel Lecture when he said the following:
Most of the people in the world are poor, so if we knew the economics of being poor, we would know much of the economics that really matters. Most of the world’s poor people earn their living from agriculture, so if we knew the economics of agriculture, we would know much of the economics of being poor.
I like this quote by Dr. Schultz and I love this new blog.
The blog is typically reserved for graduate students in Cornell’s Applied Economics program (more accurately the folks who make up Chris Barrett’s research group), but this summer the blog was opened up for graduate students from outside of Cornell to write about their research. I took them up on the offer and yesterday they published a piece in which I talk about my recent trip to Myanmar trying to study the economics of hope.
Here’s the article:
As behavioral economics has become the mainstream of economic science, there has been a growing recognition that economic behavior is often influenced by historical experience, social observation, and individual aspirations. A recent demonstration of this can be found in a widely discussed article published last May in Science. Banerjee et al. (2015) speculate about the specific mechanisms driving the results of their evaluation of a multi-dimensional program aiming to ‘graduate’ participants from poverty, saying:
Perhaps this program worked by making beneficiaries feel that they mattered, that the rest of society cared about them, that with this initial help they now had some control over their future well-being, and therefore, the future could become better. (p. 14)
Several other studies have aimed to measure the formation of aspirations in India,Pakistan, Ethiopia, Indonesia, Kenya, and Peru. They all demonstrate something fundamental about human behavior, particularly when surrounded by life-stealing poverty.
Psychologists (see Snyder, 2002 for a summary) say hope is comprised of three elements: aspirations (or some specific goal), avenues (or a visualized pathway toward aspired outcomes), and agency (or a feeling one can attain aspired outcomes). In aworking paper, Travis Lybbert and Bruce Wydick (2015) draw a distinction between wishful hope, which they call “Hope 1,” and aspirational hope, which they call “Hope 2,” Of primary interest to development economists then is “Hope 2,” as aspirations without sufficient agency or avenues could become wishful and relatively inconsequential in economic decision making.
I’ve been part of a team of researchers trying to contextualize this research to Myanmar. The Myanmar Development Resource Institute (MDRI) is a think-tank established to provide independent policy analysis and research related to economic reform, poverty reduction, and improved governance. Michigan State University’s Food Security Groupand IFPRI have partnered with MDRI to provide technical support on an agricultural and livelihood household survey of Mon State (a coastal region close to Thailand in Southern Myanmar).