We know everything about poor, who they are, where they live what they eat, but honestly do we understand poor people? Poverty has been tackled based on three main foundational blocks: one is knowledge that includes literature, economic approaches and ideology that created guiding narratives to explain poverty, second are the soft and hard structures: the soft being the policies, programs, reports and the hard ones the investments let`s say in houses, sanitation, schools or roads; third are Techniques which include monitoring tools, econometric packages or mathematical approaches. But truth is that we know very little about how poor people think and that`s why we struggle to understand how they make sometimes such bizarre choices. Furthermore as the challenge now is to address extreme and chronic poverty it is mandatory to have a more assertive and chirurgical touch and look at poor through an expanded understanding of human behavior. One of the trends will be to go a bit deeper and ask a revolutionary question: Is poverty a mind-set or a mind-trap? A fundamental element of mainstream development policy is the idea of rational decision making. But a new branch called behaviour economics claims that psychological factors end up determining more choices than pure rationality. People thoughts are based on dual thinking. People tend to think automatically, not deliberately and make decisions based on what comes into our mind quickly. On a second level there is deliberative thinking performed to do complex calculations, reflections or self-control tasks that are instead effortful. How can this help us understand the poor? It may give us answers to very interesting questions: Why 30% of poor`s income still starving goes to alcohol, radios or cigarettes? Why poor people normally have a big TV and DVD before becoming food secure? Why income increase leads to more bad-nutrition as it happened in India in recent years? Why poor spend astronomic amounts of money in marriages, funeral or parties? The answer is simply: because they are just like any one of us. We tend to fall on this mis-conceived idea of poor as suffering beggars but while they are poor they are just like any humans that need entertainment, social gatherings or pleasure. They try to compensate things and reallocate some income to some activities that give them immediate pleasure and that is an important coping strategy to deal with their chronicle deprivation. Looking now at Carnival in Rio, no matter how poor Brazilians are they just won´t miss the festivities and save all year for that. Is that irrational? It may seem it is but the reason behind is that they do not share this believe that our magnificent plans will radical change their lives. Most frequently they behave skeptically thinking that any significant change will just not worth the sacrifice or just will take too long. They center in the here and now, instead of dwelling in the past or worrying with the future, a premise that westerns struggling with depression are taught to be one of the sources of happiness. So just as any common person they try to be happy under the constraint of poverty doing short-term automatic decisions.
Try to picture yourself: in hazardous or remote areas with no cinema, concerts or other distraction, as poor stated a TV may be as important of even more than food. When poor`s income increases they do not start including more nutritional foods but instead tend to consume more tasteful food such as fast food or even more sophisticated life style food rather than using higher nutritional standards. This has been leading to diabetes and obesity for example in India. Furthermore parties, social events or even funerals reflect their sense of honour, belonging or even dignity that is also important for poor albeit their status. This shows that poor`s decisions are influenced by expectations of their own life and perceptions of those around them that are guided by different context factors and cultural values that usually challenge pure rationality.
In addition, the constraints of poverty such as time pressure (seasonal, harvests) and financial stress cause cognitive strain making more difficult to activate the deliberative system associated to conscious reasoning making instead quick decisions that rely more on the automatic choice. The constant, day-to-day hard choices associated with poverty erode individual’s psychological and social resources for economic decisions that by chronically trapping poor in a short-term vision perpetuate poverty. In this sense poverty is not simply a shortfall of money, but a condition that blocks the potential and capacity to make good decisions. In the future we can use cognitive and non-cognitive psychological variables to decode poor`s motivations and guide them into more successful choices out of poverty. Thus minor low cost policies may have a great impact on achievements of development goals just by focusing on how to present the program or initiative. Making the crucial aspects of the choice salient and making it cognitively less costly to arrive at the right decision by using techniques such as good Framing (when people may give greater weight than they should to information that has limited, if any, relevance) or Anchoring that uses an aspect of the environment that has no direct relevance to a decision but that nonetheless affects judgments or other techniques such as simplification, reminders and commitments devices can be employed by policy makers to help people decide better and reduce poverty.
The imagination is the limit of our creativity and as our imagination is infinite so is our capacity to formulate new ideas. One thing is for sure in the future development will be less a formula and less a narrative or ideology. Development will provide more specific “à la minute solution”, but the leading mantra will be to ultimately understand what drives change.