Poor People Behaving Badly?

Aid Watch: Poor People Behaving Badly?

… A growing body of work, including the Duflo and Banerjee study and the recent book Portfolios of the Poor, contributes to understanding the complex economic lives of the poor and chips away at misconceptions about poor people having “nothing,” living hand-to mouth, and immediately spending every penny they receive on food and other absolute basic necessities.

Is it really such a big surprise that the poor also want recreation? That the poor have a life? Including some of the same vices that the rich have?

The larger issue is explaining the seeming irrationality of, for example, Mr. Obamza’s decision to spend his evenings in a bar while his children sleep without a mosquito net. Could it be that outsiders make simplistic assumptions about the perceived value of bed nets to people like Mr. Obamza?

For example, a chapter by Michael Kremer and Alaka Holla in the book What Works in Development shows that demand for bed nets (and other life saving technologies like de-worming drugs or water disinfectants) collapses once you change from giving them away for free to charging even a tiny amount. Does this show that some parents don’t think saving their child’s life is worth spending even a very small amount of money? Maybe, but more likely it indicates that there is something wrong with our assumptions, as Kremer and Holla explore.

Perhaps it is that parents do not really believe in the efficacy of nets, drugs, or water purification tablets. Going even further than Kremer and Holla, we speculate that belief in the scientific theories underlying all these products is not so easy to achieve in a poor society. Rich people believe in scientific medicine not only based on their education, but also because they see it working for themselves and everyone around them. Scientific medicine is a harder sell in a society that has never had a well-functioning health system to demonstrate its benefits.

Researchers are testing these and many other possible explanations (here the randomized controlled trials are actually more useful, compared to blanket statements like “nets work”). We are just as worried about stereotyping the poor as anyone else, but we’re also glad the previous taboo is falling. The efficacy of aid interventions depends very much on understanding the behavior of the poor.