World Development Report
MIND, SOCIETY, AND BEHAVIOR
By World Bank Group 2015
Introduction
The World Bank has got it!! This report is a marriage of Behavioral Economics, Neuroscience and Culture and Development. And it also understands the need to “reframe” ideas to get them understood. It talks about all of their research, and has over 100 concrete examples of how this is actually working around the world. It has specific recommendations for all manner of programs. I saw ONE of these in operation In Nicaragua. Kairos presented a lock box to the communities they work with to help them save for a goal. That simple contribution increased their savings rates enormously. There are hundreds of examples like that in this report.
I found the social interaction examples the most informative. I had not realized how much we are driven by our social ties, and how important they are for any kind of organization or effort. I was also surprised at how effective participant control was as opposed to governmental control. Even building the scorecard or measuring tool WITH the participants had a major impact on the results.
This one example is particularly fun:
I highly recommend this report to anyone working on economic development or community organizing anywhere - developed or developing countries. OR anyone that wonders if Behavioral Economics has a future! The World Bank is using it extensively. It is also a wonderful introduction to modern psychological /social research replete with concrete examples.
This introduction to the report is a LOT longer than I ever intended. It is mostly for my own purposes - I think better when I process information. If you are not yet convinced that you need to read the report, do continue on here. BUT I highly recommend you just go get the thing. It isn’t that long! You can do it - I’m counting on you.
One thing I learned for sure, do not underestimate the power of the daily soap - radio or TV. Several of the stories in here relate to profound economic changes that were encouraged by means of soap opera story lines! It may be that the effect does not last long, but it is a start.
This is a BIG DEAL
I think this report is a very big deal. I have been reading and thinking about economic development since I had the opportunity to visit Tanzania with my son in 2000. I did a little research then, and found some work by sociologists that seemed to understand what was going on. I wrote a bit about that in this blog entry - with some stories, which I continue to relate to friend and foe alike. You might still enjoy it.
As I continued reading in the field of poverty and economics, I stumbled onto Behavioral Economics through a couple of books recommended by our local newspaper’s economist columnist, and then I got into some neuroscience as it became increasingly clear that we humans are not really rational beings. I thank all the people who recommended these books to me. Here’s a bit of a summary of some of that which I had done some time ago. I put a list of the books at the end of this - in case I forget!
I AM DONE
And now I have found this World Bank report - and I can stop and move on. I can’t believe this has been out there for over a year and I never heard about it. This takes the culture stuff, the economics stuff and the neurological stuff, and wraps it all together in a wonderful synthesis. This report is an excellent review of the scientific literature around human behavior, and how it affects societies and their economic and social development. It is replete with examples and recommendations. If you are at all engaged in development issues around the globe, this should be your bible for the near future. And the amazing thing is that this is NOT rocket science. Many of the things pointed out here are very simple to implement, assuming you understand how humans actually work. A simple change in how something is presented can have a profound effect on how it is perceived and whether it is implemented.
For a better summary of the contents, read this brief “about”:
How To Get Your Copy
A free copy of the report in PDF format is here:
This is the official site for the document, but you cannot download it there. But there are a lot of other resources, such as synopsis, audio versions, background reports, etc.
ALL world bank documents are here:
The Video Introduction and Presentation
There is a video of the official introduction of this report. I love how the speaker introduces it. Advertisers and politicians understand this information well, but economics has been ignoring it. Politicians use this to get elected, but then forget about it. The speakers recount many of the studies in the report that are quite amazing.
Well worth your time: (do not PAUSE the video - doesn’t work, and it may die at some point.)
You can find a lot of YouTube videos about this report if you search YouTube for “world development report 2015”. Several in Spanish!!
Findings Summary
We have discovered three basic things about human beings and how they think:
People think automatically, using mental shortcuts most of the time.
People think socially, on the basis of social norms and under social influences.
People think in mental models, drawn from their society and shared history.
There is a pattern to how people think, and advertisers use this all the time. If we understand the pattern, we can better help people to do the things that really promote their well being.
Excerpts
From the Foreword:
Many development economists and practitioners believe that the “irrational” elements of human decision making are inscrutable or that they cancel each other out when large numbers of people interact, as in markets. Yet, we now know this is not the case. Recent research has advanced our understanding of the psychological, social, and cultural influences on decision making and human behavior and has demonstrated that they have a significant impact on development outcomes.
And this is from the Overview:
The title of this Report, Mind, Society, and Behavior, captures the idea that paying attention to how humans think (the processes of mind) and how history and
context shape thinking (the influence of society) can improve the design and implementation of development policies and interventions that target human choice and action (behavior). To put it differently, development policy is due for its own redesign based on careful consideration of human factors.
. . .
The Report draws on findings from many disciplines, including neuroscience, cognitive science, psychology, behavioral economics, sociology, political science, and anthropology. In ongoing research, these findings help explain decisions that individuals make in many aspects of development, including savings, investment, energy consumption, health, and child rearing. The findings also enhance the understanding of how collective behaviors—such as widespread trust or widespread corruption—develop and become entrenched in a society.
. . .
This Report discusses how taking the human factors more completely into account in decision making sheds light on a number of areas: the persistence of poverty, early childhood development, household finance, productivity, health, and climate change. The framework and many examples in the Report show how impediments to people’s ability to process information and the ways societies shape mindsets can be sources of development disadvantage but also can be changed. The three ways of thinking emphasized here apply equally to all human beings. They are not limited to those at higher or lower income levels, or to those at higher or lower educational levels, or to those in high-income or low-income countries. Numerous examples from high -income countries throughout this Report demonstrate the universality of psychological and social influences on decision making. The Report documents the cognitive limitations of people in all walks of life, including World Bank staff (see spotlight 3 and chapter 10 ). Development professionals themselves think automatically, think socially, and think with mental models and, as a result, may misidentify the causes of behavior and overlook potential solutions to development problems. Development organizations could be more effective if practitioners became aware of their own biases and if organizations implemented procedures that mitigate their effects.
The three ways of thinking emphasized here apply equally to all human beings. They are not limited to those at higher or lower income levels, or to those at higher or lower educational levels, or to those in high income or low-income countries. Numerous examples from high-income countries throughout this Report demonstrate the universality of psychological and social influences on decision making.
Mental Models
One of their findings is that “climate” is a mental model - it is something we derive from experience, not reading or learning. It takes an enormous actual change in our experience weather to persuade us rationally that things are not as they were. Page 160 has an extensive piece on the climate change problem.
“Free” is also a mental model - if you want it done, make it FREE. A few pennies will not work.
Social awards work better than financial incentives. People will work harder to get a gold star and higher ranking with their peers, than they will for a 10 cent payment.
Mental ability can change over 10 IQ points, depending on the person’s financial situation, stress level, etc. So when they are offered a decision is very important.
The research and examples of “mental models” is very well done. The history of the slave trade in western Africa left a negative effect in the society’s level of trust. Page 65:
Thus the Atlantic slave trade turned brothers against each other, chiefs against subjects, and judges against defendants. Lower levels of trust in some parts of Africa today are related to the intensity of slave trading centuries ago. Regions that were more susceptible to slave raids due to accidental features of geography have lower levels of trust today—trust toward strangers, friends, relatives, and institutions (Nunn 2008; Nunn and Wantchekon 2011).
This one should also get your attention. P. 65
Working women are viewed more favorably in societies that did not have the plough than in societies that did, and they represent a higher share of the labor force.
Why? Because it required considerably more upper body strength to manage a plow, and it became the male role. The effect persists long after the manual plow is gone.
The profound impact of the level of trust in a society is also pretty amazing. Where trust is weak so is economic development. Weak constraints on the ruling group also correlates very highly with poverty. Think of the “hierarchical” social structure imposed by the Catholic Church in the former Spanish colonies! When leaders are regarded with more respect, they tend to be more corrupt, and the society and the society has less trust and development.
Early Childhood Mental Stimulation - see page 34. Mental stimulation at an early age is essential to the development of both cognitive skills - the automatic and the deliberative. So a reading problem for the children will benefit them throughout life.
Very early childhood stimulation has a large impact on adult success in the labor market, a 20-year study in Jamaica found (Gertler and others 2014). Community health workers made weekly home visits to teach mothers how to play and interact with their children in ways that promote cognitive and emotional development. Children who were randomly selected to participate in the program earned 25 percent more as adults than those in the control group who did not participate in the program—enough to close the earnings gap with a population that was not disadvantaged.
Page 40. They discuss the question as to why the government should intervene to help people, rather than letting them decide for themselves. I have seen this discussion in Thaler’s book on economics, but here is their summary of the problem. There is a MUCH more extensive analysis of this question on page 202. (Sorry for the length of this one.)
First, shaping choices can help people obtain their own goals. Reminders to save or take medicine help people who are otherwise caught up in life achieve objectives that they themselves have set. Commitment contracts, which markets under provide, can reinforce decisions to adopt healthful behaviors. Matching the timing of social transfers to the timing of charges for school enrollment, or making it easier to buy fertilizer at harvest time when cash is at hand, can help overcome the divide between intentions and actions for people who may be forgetful or possess insufficient willpower (that is to say, all of us). Many development policies that operate at the boundary of economics and psychology can be understood in those terms.
Second, individuals’ preferences and immediate aims do not always advance their own interests. Individuals might choose differently, in ways more consistent with their highest aspirations, if they had more time and scope for reflection. Third, socially reinforced practices and mental models can block choices that enhance agency and promote well-being and thus prevent individuals from even conceiving of certain courses of action—as when discrimination can sometimes lead people, understandably, to adopt low aspirations. Governments should act when inadequate engagement, situational framing, and social practices undermine agency and create or perpetuate poverty. Although development actors have legitimate differences on some of these issues and place different weights on individual freedoms and collective goals, widely shared and ratified human rights constitute a guiding principle for addressing these trade-offs.
Not every psychological or social insight calls for more government intervention; some call for less. Because policy makers are themselves subject to cognitive biases, they should search for and rely on sound evidence that their interventions have their intended effects, and allow the public to review and scrutinize their policies and interventions, especially those that aim to shape individual choice. Still, it is not the case that when governments refrain from action, individuals freely and consistently make choices in their own best interest, uninfluenced by anyone else. Any number of interested parties exploit people’s tendency to think automatically, succumb to social pressure, and rely on mental models (Akerlof and Shiller, forthcoming), including moneylenders, advertisers, and elites of all types. In that context, governmental inaction does not necessarily leave space for individual freedom; rather, government inaction may amount to an indifference to the loss of freedom (Sunstein 2014).
Climate Change
Page 160. There is a particularly insightful piece on why climate change opinions are so difficult to change. It has to do with worldview and social networks, much more than scientific information. There is a distinct tendency among “hierarchical individuals” (See Jonathan Haidt on that one) because those folks lean toward tradition, strong leaders, and the like. And tend to reject any new information that runs counter to those things. We typically call that conservatism! So presenting information, cleverly, clearly, or however, may have absolutely no impact on how this subgroup sees reality. In my research, it may even strengthen their existing opinions. For example, some people are less likely to buy the same light bulb for the same price if it is labeled as “environmentally friendly”. Honest.
Positive
I cannot say enough about how well done this report is. It includes the very best research that impacts human development - economics, neuroscience, farming, politics, social media. And it uses examples from developed AND developing countries. We often tend to put down people in developing countries as though there is something wrong with them. We really are all the same, although we are operating in different social, and mental models.
The report is also very well organized. Each topic has an introduction, some details, and a summary, plus references to the actual research. The references also make it appear to be a lot longer than it actually is.
The other good thing is that we have only begun to scratch the surface on how our brains work, and how our social interactions empower and control us. We may actually be able to manage this thing called civilization yet. There is hope.
Poverty and Decisions. The second chapter treatment of the problems facing the poor in simply making any decision is very well done - very empathic. It should be very helpful to anyone working with the poor in any location. One of the things I learned is that my parish’s relationship with a poor community in Nicaragua does a lot more for their mental capacity than it does directly for their financial well being, and the effect is much more enduring. The measured impact of really brief positive affirmation is simply amazing - amazing. See p. 85!
Page 89 Poverty can contribute to a mindset that can make it difficult for people to realize their own potential to take advantage of existing opportunities. It is important to consider how the process of delivering services or targeting poor people could be creating poor frames that further demotivate potential beneficiaries. A good place to start would be the names of programs and identification cards associated with them. “Needy families,” for example, could be replaced with “families in action,” or “poor cards” with “opportunity cards.”
Negative
While they grasp the idea of “mental models”, something I call our “worldview” or simply culture, they do not give it the full weight which it deserves. The models in our head are so powerful that we rarely even see that they are a model or a view. We simply see that this is how life works. The leaders in a specific culture are also suffering under the same mental models, and may be unable to even see them as a problem. And I am not so sure that the mental model of saving or long term perspective can be as easily changed as some of their experiments indicate. But . . . this is light years beyond every other approach to the problem that I have seen.
There is a bit of repetition in the different portions of the report, citing the same problems or examples several times. BUT . . . it is a decent pedagogical approach.
Original Research
Most of the document is a summary of other research projects around the globe. But they group also initiated some original research in the area of how poverty itself affects decision making. Most of the psychological research utilizes college students in elite universities - they are a little “WEIRD” - western educated, industrialized society, rich, democratic. So the group undertook to replicate some of their work with other populations. It turns out that poor people are quite different from their richer co-citizens, and quite similar across nationalities in how they think about economic opportunities. See page 94.
Effect of Poverty on Childhood Development
This was an eye opener for me. I had read about the effect of poverty on the development of a child’s body and brain, but had not thought about the learning patterns, decision making, and things that affect their ability to make decisions for their entire life. P. 98
They are also likely to have had less opportunity to develop the critical skills—including skills in controlling their impulses, understanding the perspectives of other people, and focusing attention—that are important for engaging effectively with teachers and other children, paying attention in class, completing assignments, and behaving appropriately.
. . .
Finally, the chapter reports evidence that early childhood interventions can mitigate the effects of impoverished environments on children.
. . .
Page 99. Do the wealth gaps in children’s skills narrow over time? The evidence to date indicates they do not.
This chapter alone is well worth your time to read, whatever your role in life. They cite numerous studies that indicate that poverty affects children for their entire lives - partially from nutrition, but also in many other ways that it hinders their abilities. The differences are also culturally based. Different tribes in Kenya have different behaviors toward their infants, and the children’s skills are vastly different as a result. See page 103! SO, a fundamental part of progress here lies in pre-school learning, school teaching methods, and parenting skills. Talk about changing the world! Anti poverty programs have to reach beyond providing nutrition and money! Some cultures believe that talking to infants is inappropriate. How does one change that? One key finding is that it is important to persuade parents and caregivers that the intelligence and abilities of their children are very malleable, and not set in stone. How they are treated in childhood will deteremine their capabilities.
And check out the statistics on “home team advantage” on page 184!
