By Professor Sayantan Ghosal (Economics)
The starting point for much existing analysis of chronic poverty is that external constraints drive a poverty trap. Possible candidates include malfunctioning credit and insurance markets, status quo biases that hinder investment and innovation, and ‘bad’ institutions such as corruption.
However, such analysis does not adequately take into account how the experience of poverty impacts on the beliefs and aspirations of the poor. A newer literature focuses on how poverty has detrimental self-reinforcing effects on self-perception, self-confidence and ‘aspirations failure’. Aspirations failure refers to the condition of a person who does not aspire to escape poverty although poverty is escapable with additional effort that is within their means.
However, are such internal constraints a cause of poverty, or its consequence? Dalton et al. (2012) supply a theoretical framework that links such internal constraints to poverty traps. Their starting point is the assumption that individuals underestimate how their aspirations may evolve over their lifetime as a consequence of their own effort. The rich and poor alike suffer from this bias, but it has greater impact on the poor.
A key factor that makes aspirations failure more likely for those that are already poor is they face much greater downside risk from bad luck in their lives. The greater downside risk lowers their expected benefit of investing effort into any goal: when your child is performing poorly in school, and you are worried about not having enough money in the near future, you may choose not to make the investment (eg. hiring a remedial teacher) to mitigate your child’s poor performance. Lower effort, driven by higher risk, increases the odds of low performance and feeds into lower aspiration and achievement in the long run.
‘Dream building’: preliminary evidence
An ongoing project in Kolkata is working to raise the aspirations of a marginalised group in society: sex workers. Given the social stigma attached to the sex trade, particularly in India, many sex workers suffer from a loss of hope and a sense of defeat. The training programme, called ‘Dream Building’, is being carried out in collaboration with the Durbar Foundation, a non-governmental organisation in Kolkata.
The programme aims to give sex workers a renewed sense that they are as entitled as others to hope and to aspire, to teach them how to work towards these aspirations, and to develop a positive, proactive outlook on the future. In eight sessions, experienced trainers use novel methods of discussion and engagement with the subjects. Some of the trainers are themselves former sex workers who have reinvented their lives and careers and thus serve as role models for the participants.
Along with my co-investigators (Sanchari Roy (CAGE), Anandi Mani (CAGE), Sandip Mitra (ISI Kolkata) and Smarajit Jana (Durbar Foundation)), I undertook a small-scale pilot study of the project between February and July 2011. A sample of 34 sex workers was randomly selected and interviewed for the study in the localities of Khidirpore and Kalighat4. For comparison, eight other sex workers who had not been exposed to the workshops were interviewed. The pilot focused on outcome variables related to behavioural and psychological measures, such as opinion about oneself, sense of shame (arising from sex work as a profession), feeling of discrimination, locus of control.
(i) Comparing psychological outcomes before and after workshops
It is found that being exposed to the dream-building workshops improves the sense of self-worth in women — it reduces the chances of these women thinking of themselves as being a fallen woman or a sinner by one-third. Workshop participants are also significantly (by around 30%) less likely to feel ashamed of their occupation. Following the workshops, these women are also significantly (by around 30%) more likely to feel discriminated against, which might be reflective of their heightened sense of self-worth. The impact of the workshops across the two localities appears to have been the same for these three outcomes.
The intervention also improved these women’s self-confidence and strengthened their belief that their life was under their control and increased their sense of mobility.
(ii) Comparing outcomes with and without workshops
When the sample of 34 women who attended the workshops is compared with the eight women who did not, the results are qualitatively similar to those reported in the preceding paragraph.
A detailed analysis of the results reported here are available in Ghosal (2013a,b).
In Scotland, a related initiative is having a similar effect with a different group of people – namely school children in Stirling and Glasgow living in areas with high poverty rates. Sistema Scotland, following an initiative pioneered in Venezuala, has created the Big Noise orchestra. This initiative isn’t solely about the music: it is as much about empowering young people with the aspirations and confidence that will help equip them with the self-belief they need to escape from poverty. A report commissioned by the Scottish Government notes “evidence that Big Noise is having a positive impact on children’s personal and social development, including increased confidence, self-esteem, sense of achievement and pride, improved social skills and expanded social networks”.
Pro-poor policy interventions that aim to alter internal constraints (such as beliefs and aspirations), in addition to providing resources to relax external constraints, could be more effective in mitigating poverty traps. Changing beliefs is vital to break the failure of aspirations that can be found in poverty traps.
The pilot study discussed here has been extended to include a scaled up piece of fieldwork (with nearly 600 participants) to assess the impact of ‘Dream Building’ on the beliefs and choices of participants (Ghosal et. al. (2014)). This will provide further, robust evidence for the link between raising aspirations and improved outcomes, and will be a first step towards calculating the costs and benefits of interventions such as ‘Dream Building’.
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- Ghosal, S. (2013, a), , “The Design of Pro-Poor Policies” , Chapter 6, of the CAGE Policy Report available at http://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/events/publiclectures/policymay2013/6.chapter_six.pdf
- Ghosal , S. (2013), “The Design of Pro-Poor Policies: How To Make Them More Effective”, Chatham House Policy Briefing Paper, http://www.chathamhouse.org/sites/default/files/public/Research/International%20Economics/0713bp_ghosal.pdf
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Photo credit: ‘Kolkata waste dump vision’ © Wolfgang Sterneck