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The Nobel Prize season comes once a year. Each years Nobel Prize focuses the public on one area. The 2019 economics award was awarded to scholars in the field of poverty research.
Poverty problem is exactly one of the most concerned problems in Chinese society.
What are the implications of the three scholars research results on reducing global poverty for our poverty alleviation? How can we scientifically understand poverty alleviation through Nobel Prize?
First of all, lets meet three new Nobel Prize winners in Economics: development economists: abhijit v. Banerjee, Esther Duflo and Michael Kremer.
In our practice of poverty alleviation, it is found that waiting to rely on others and being content with the status quo often occur, which seriously hinders the effect of the fight against poverty. These phenomena suggest that the causes of poverty not only come from objective conditions, but also from the main level.
How to understand and intervene poverty more comprehensively from the subjective level is one of the core contributions of the three winners of the Nobel Prize in economics this year.
How does poverty limit us?
What do the poor do when they have money?
In China, examples such as a crackdown on the rich are often seen in the media. However, what is the psychology of consumption after getting rich overnight?
Banerjee and the researchers found a series of phenomena in the poor:
When they have money to buy more food, they choose to buy something more delicious, more expensive, or even big things like TV sets; they are more likely to have no plan for life; they are less likely to make savings and more likely to make short-term consumption.
There are many other subjective phenomenau2014u2014
Poverty seems to cause people to become more irrational, resulting in psychological disadvantages, so that the poor fall into a vicious circle. This vicious circle is generally called poverty trap.
So why do these phenomena occur?
We can think of self-control as a rechargeable battery, which will consume self-control when resisting temptation, and cannot resist temptation when self-control is insufficient.
The poor are always resisting the temptation: because they have no money, they are hungry or unable to buy delicious food or other temptations, so their self-control is constantly consumed. When they have money, they may not be able to control themselves to buy temptations.
2. The poor and humble husband and wife mourn for everything.
Peoples cognitive resources are limited. When we are busy or preoccupied, we usually dont have the energy to make major decisions, and its easy to make mistakes.
Because of poverty, the same situation happens to the poor more frequently. At this time, they may not be able to make rational decisions. Some studies have even found that the same group of poor people have lower IQ scores when they have no money than when they have money.
3. Poverty makes people short-sighted.
Poverty, on the one hand, makes people more inclined to consume at present rather than postpone consumption, on the other hand, it also makes people think about the future shorter (at most, one month later or three years later).
The researchers found that when poor people have money, they spend more than they save, so wealth is hard to accumulate.
Why dont they want to get out of poverty?
In my interview with colleagues in the poverty alleviation front line, I learned that in the work, we will inevitably encounter difficult to leave home who do not cooperate with the work and do not actively get rid of poverty.
These poor people are content with the status quo and do not want to make progress. They are obviously good projects, but they are unwilling to try. They are afraid of difficulties. These subjective factors often affect the promotion of poverty alleviation measures, the effect of poverty alleviation, and make their poverty alleviation work more difficult.
So how does poverty stop people?
1. Long term poverty makes peoples expectations very low.
Once people achieve the desired results, they will reduce their efforts. The rich and the poor are the same. But the expectations of the poor are set too low, and they also reduce their efforts after reaching the expected goals. It seems that the outsiders are content with the status quo and do not want to make progress.
One part of the ambition of helping the poor first is the expected goal of the poor.
2. The poor are more afraid of risks and uncertainties.
In addition to the lack of skills, unfamiliar livelihood patterns bring greater uncertainty and risk to the poor. As a result, there is no adequate guarantee or success model, and a great deal of energy is needed to persuade the poor to participate in new projects.
3. The poor are prone to fear difficulties and retreat.
Banerjee proposed that we should provide all kinds of ladders for the poor, because they face many kinds of small difficulties in their lives that the non poor do not pay attention to. After all, success requires every step to be right, while failure requires only one step to be wrong.
Especially in the implementation of new projects, due to the lack of experience and various small difficulties brought about by poverty, it is easy to make the project fail, which also causes the poor to be more pessimistic and fear difficulties.
Do a good job in poverty reduction in the world
Since the general secretary Xi Jinping first put forward the poverty alleviation program for the first time since 2013, China, as an international top student in poverty alleviation, has continued to create a miracle of reducing poverty: the incidence of rural poverty has decreased from 10.2% to 1.7%, and the realization of the solemn promise of poverty eradication of rural poor people under the current standard of 2020 is just around the corner.
However, poverty alleviation is always on the way. Even if 100% absolute poverty is eliminated, there is still a higher standard definition of relative poverty and the existence of people returning to poverty. Therefore, the core of poverty alleviation is to stimulate the endogenous power of the poor and achieve self hematopoiesis.
Successful poverty alleviation work is the result of favorable time, favorable place and harmonious people, and the most important is the role of people. In the face of a variety of non objective factors, we must implement more precise poverty alleviation strategiesu2014u2014
1. Poverty alleviation cant always give money, otherwise it is easy to meet the expectations of the poor. At the same time, we should set a model and propagandize it, so that the underachievers can realize that they can make more profits by taking the initiative to get rid of poverty.
2. Poverty alleviation should make the poor dare to make mistakes. First of all, we need to have a better insurance mechanism so that the poor can bravely try. At the same time, the village should have model and big family to take the lead, so that the project will have more followers.
3. The poor need hands-on help. Only when enough guidance is given by those who implement poverty alleviation policies can the poor be confident to persist in facing difficulties and participating in projects. All kinds of small problems in the process of the project also need to be solved in time to ensure the success of the project.
We can also use behavioral public policy (BPP) and commitment mechanism, supervision, reminder and other means to help poor groups pursue long-term interests, resist immediate temptation, increase participation rate and sustainability of poverty alleviation projects, and reduce halfway out.
We must understand poverty in order to fight it. Facing the subjective factors that lead to poverty and affect poverty alleviation, we need to strengthen the research in this field, and more scholars and poverty alleviation practitioners need to provide more effective solutions.
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Li Meng, Ph.D., School of public management, Tsinghua University. More