World Development Report 2015: Understanding mind, society and behavior

My only worry is that it will be read more diligently by private marketers selling wares and politicians running for office than by people designing development interventions.” This is what the Senior Vice President and Chief Economist of the World Bank, Kaushik Basu had to say about the World Development Report 2015 published about a fortnight ago. The full report can be downloaded from the World Bank Site. The report is interestingly titled “Mind, Society, and Behavior.”

The central argument of the Report is that policy design that takes into account psychological and cultural factors will achieve development goals faster. The two main goals of the report are:

  • To change the way we think about development problems by integrating knowledge that is now scattered across multiple disciplines such as behavioral economics, psychology, sociology, anthropology, neuroscience, and political science.
  • To help development practitioners use the richer understanding of the human actor that emerges from the behavioral sciences in program design, implementation, and evaluation.

The report has some interesting finding including:

  • Poverty constitutes a cognitive tax that makes it hard for poor people to think deliberatively, especially in times of hardship or stress
  • An experimental cash transfer program which automatically saved a part of the funds on behalf of beneficiaries, and then disbursed them as lump a sum at the time when decisions about school enrollment for the next year were being made, resulted in increased enrollments for the following year
  • The likelihood of default on loans became three times less likely with a simple change in the periodicity of meetings between microfinance clients and their repayment groups to weekly rather than monthly.
  • Boys from backward classes were just as good at solving puzzles as boys from the upper castes when caste identity was not revealed

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