Harnessing Human Nature for the Reduction ofPoverty

Nava Ashraf

International Forum on Reduction of Extreme Poverty | July 2014

Health

Education

Development

Development is Co-Produced

Development is Co-Produced

Resources and Supply is Not Enough

More than 13 million needless deaths every year fromconditions for which safe, effective and affordable preventionand treatment exist

Insecticide treated nets prevent malariaCondoms to prevent HIV/AIDsWater purification to prevent waterborne illness

Families remain trapped in poverty, even when simpleyield-improving agricultural technologies and savingsinstruments are available.

Resources and Supply is Not Enough

More than 13 million needless deaths every year fromconditions for which safe, effective and affordable preventionand treatment exist

Insecticide treated nets prevent malariaCondoms to prevent HIV/AIDsWater purification to prevent waterborne illness

Families remain trapped in poverty, even when simpleyield-improving agricultural technologies and savingsinstruments are available.

The Co-Producer

The Co Producer

How We (All) Make Decisions:

Universal PrinciplesExacerbated under Stress& PovertyObstacles —>Levers

The Co-Producer

How We (All) Make Decisions:

Universal Principles

Present-BiasLimited BandwidthSocial Influencers

Fast vs Slow Thinking

“Fast” Mammalian brain: involved more in decisions for now (whenwants are preferred) than for decisions for later.“Slow”Neocortex: involved in both types of decisions.

Choosing Fruit vs. Chocolate: Read and van Leeuwen(1998)

Choosing(Today( Ea.ng(Next(Week(Time(

If(you(were(deciding(today,(would(you(choose(fruit(or(chocolate(for(next(week?(

Patient Choices for the Future

Choosing(Today( Ea.ng(Next(Week(Time(

Today,(74%(of(subjects(choose(fruit(for(next(week.(

Impatient Choices for Today

Choosing(&(Ea,ng(Simultaneously(Time(

If(you(were(deciding(today,(would(you(choose(fruit(or(chocolate(for(today?(

Time Inconsistent Preferences

Choosing(&(Ea,ng(Simultaneously(Time(

Today,(70%(of(subjects(choose(chocolate(for(today.(

We want to do the right thing

...we just find it difficult.

We want to do the right thing

...we just find it difficult.

Cognitive Load

80 students brought into a laboratoryTold to memorize a number

50% memorize a 2-digit number (low cognitive load)50% memorize a 7-digit number (high cognitive load)

Given snack choice: fruit salad or chocolate cake

Shiv and Fedorikhin (1999)

Results (Ashraf et al, 2006)

Average increase in bank account savings: after 6 months,46%; after 12 months, 80%

Increase for those who took up: after 6 months, 192%; after12 months, 337%

Similar product subsequently used by the Bank to help clientskeep commitment to stop smoking

A word on methods: Field experiments

Need to know what works and why

But in evaluation, there is always the fundamental problem ofidentification

Randomized Control Trials (RCTs) allow for causal inferencethrough randomization into treatment and large sample sizes

Particularly helpful in demonstrating value of psychological &sociological factors in development

A word on methods: Field experiments

Need to know what works and why

But in evaluation, there is always the fundamental problem ofidentification

Randomized Control Trials (RCTs) allow for causal inferencethrough randomization into treatment and large sample sizes

Particularly helpful in demonstrating value of psychological &sociological factors in development

A word on methods: Field experiments

Need to know what works and why

But in evaluation, there is always the fundamental problem ofidentification

Randomized Control Trials (RCTs) allow for causal inferencethrough randomization into treatment and large sample sizes

Particularly helpful in demonstrating value of psychological &sociological factors in development

Incentives against Procrastination

Immunization rates of just5% in rural Udaipur(India)Small incentive (1 kg rawlentils per vaccine) raisedfull immunization to 39%

Children who wereoffered immunizationwithout lentil incentive:16%

Banerjee, A., Duflo, E., Glennerster,R., & Kothari, D. (2010).

(Banerjee et al., 2010)

(Banerjee et al., 2010)

Fast vs Slow Thinking: Limited Bandwidth

The Power of Defaults: Organ Donation

(Johnson and Goldstein 2003)

Defaults and 401k Participation

Fortune 500 company401(k) started in 1985

Check box to contribute

In April-1998 key change

Check box not to contribute

Does opt-in vs. opt-out affect retirement savings?

% of New Employees Enrolling

(Madrian and Shea 2001)

Status Quo Effect vs. Company Tenure

It takes 20 years to overcome the cost of filling a form!

Just Assistance with Forms Makes Significant Difference in:

Access to Banking ServicesAmong people given a referral letter to a bank and instructions onhow to open an account, 90 percent had thought they would followthrough — but only 50 percent didA bank representative assisting people with the forms had a largepositive effect on take-up (Mullainathan and Shafir, 2009)

Applying to College:

Individuals receiving tax preparation assistance were also offeredhelp with the FAFSA & aid estimates compared against tuition costsCombined assistance & information increased FAFSA submissionsHigh school seniors whose parents received the treatment went from28%-36% more likely to have completed 2 years of college(Bettinger et al, 2012)

Making it Easy:

Cost-Effectiveness

Social Identity

The drive for social inclusionis fundamental, sometimestrumping the drive forphysical sustenance.In his landmark studies,Harry Harlow showed thatinfant monkeys choose tostarve in the arms of a soft,cloth “mother” over havingaccess to milk from a wire“mother.”

.

Social Identity

Social Identity – Perception of oneness with a group of people – selfconcept extends to include social group.

Stems from:

Cognitive factors: categorization of individuals into groups;and salience of outgroupsMotivational factors: distinctiveness and/or prestige of thegroup; survival

Identifying barriers to adoption of new contraceptiontechnologies

Modern contraception provides unprecedented degree of choicefor women in developed countries, but adoption rates lag indeveloping world

Unmet need estimated at 25% in sub-Saharan Africa

Open question: What is driving the rates of excess fertility?

Assumed to be lack of “access” (availability, suitability,misinformation)

Identifying barriers to adoption of new contraceptiontechnologies

Modern contraception provides unprecedented degree of choicefor women in developed countries, but adoption rates lag indeveloping world

Unmet need estimated at 25% in sub-Saharan Africa

Open question: What is driving the rates of excess fertility?

Assumed to be lack of “access” (availability, suitability,misinformation)

Field Experiment Design

Primary driver of Excess Fertility assumed to be access; study offersvoucher lowering barriers to access

Field Experiment Design

Field Experiment Design

Results

Women given voucher alone:23% more likely to visit a family planning nurse38% more likely to take up a concealable form of contraception57% reduction in unwanted births

...than when they were given the voucher with their husband.

Only when women have greated autonomy to adopt contraceptiondoes it lead to a decrease in unwanted births.

...but is that the whole story?

Results

Women given voucher alone:23% more likely to visit a family planning nurse38% more likely to take up a concealable form of contraception57% reduction in unwanted births

...than when they were given the voucher with their husband.

Only when women have greated autonomy to adopt contraceptiondoes it lead to a decrease in unwanted births.

...but is that the whole story?

Results

Women given voucher alone:23% more likely to visit a family planning nurse38% more likely to take up a concealable form of contraception57% reduction in unwanted births

...than when they were given the voucher with their husband.

Only when women have greated autonomy to adopt contraceptiondoes it lead to a decrease in unwanted births.

...but is that the whole story?

Results

Women given voucher alone:23% more likely to visit a family planning nurse38% more likely to take up a concealable form of contraception57% reduction in unwanted births

...than when they were given the voucher with their husband.

Only when women have greated autonomy to adopt contraceptiondoes it lead to a decrease in unwanted births.

...but is that the whole story?

Maternal mortality

1 woman in 27

Maternal mortality

Maternal mortality

Maternal mortality

Pilot Results

What other relationships exist within thehousehold...

Curriculum

Threats to the Social Identity

Proinflammatory cytokine activity and cortisol (i.e., stress) andthat these changes occur in concert with shame.

Chronic social self threats and persistent experience ofshame-related cognitive and affective states predictdisease-relevant immunological and health outcomes in HIV.

And. . .

Neurologically, Social Exclusion = Physical Pain

(Eisengerger, Liberman, & Williams, 2003, Science)

(A) Increased activity in anterior cingulate cortex during exclusionrelative to inclusion. (B) Increased activity in right ventral prefrontalcortex during exclusion relative to inclusion. Both areas are active duringphysical pain.

Prosocial Motivations

In repeated economic experiments, people show a propensityto give up money in order to meet other needs.

Leveraging Pro-Social Motivation in the Provider

Harnessing innovative distribution mechanisms

Female condoms: new technology that can prevent HIV/AIDStransmission and increase women’s contraceptive options – but adifficult technology to learn, need innovative distribution method

Field experiment context

Ashraf, Bandiera and Jack: “No Margin, No Mission? A Field Experiment on

Incentives for Public Service Delivery.” May 2013.

Design and implement a field experiment with SFH Zambia, apublic health organization

1. Census: Survey all salons in Lusaka (~2500)

2. Randomly assign 1200 salons to four treatments

3. Invite to training, learn about incentives

4. Sales and monitoring: collect monthly data on hairdressers forone year.

Ashraf, Bandiera and Jack: “No Margin, No Mission? A Field Experiment on

Incentives for Public Service Delivery.” May 2013.

Design and implement a field experiment with SFH Zambia, apublic health organization1. Census: Survey all salons in Lusaka (~2500)

2. Randomly assign 1200 salons to four treatments

3. Invite to training, learn about incentives

4. Sales and monitoring: collect monthly data on hairdressers forone year.

Field experiment design

Alternative rewards

Tie reward (stars) to sales effort (# of stars proportional to social value)

Results

Stars (non-financial rewards) are much more effective thanfinancial incentives in this setting

Seems to be driven by warm glow effect and social comparison

Results

Stars (non-financial rewards) are much more effective thanfinancial incentives in this setting

Seems to be driven by warm glow effect and social comparison

Community Health Workers

Shortages of health workers across sub-Saharan Africaundermine national health systems

3% of health work force in Africa, which has 11% of world’spopulation and 24% of disease burden

In Zambia, 12 million people but only 646 doctorsCHWs a potentially innovative solution to this problemWhat are the optimal recruitment and compensation strategies

Ashraf, Bandiera & Lee: “Recruiting and Motivating HealthWorkers: A Field Experiment in Zambia. (Ongoing)

CHW Recruitment Posters

Community oriented poster

Career oriented poster

Conclusions

Getting inside the head and heart of the human being revealsthe Universal Principles of :

Present-BiasLimited BandwidthSocial Influencers for Belonging

These can be incorporated into Smart Design of Programs, Servicesand Products and leveraged, to maximize impact

Just as development, health, education is co-produced, so isKnowledge:

Becoming Co-Generators of Knowledge

Conclusions

Getting inside the head and heart of the human being revealsthe Universal Principles of :

Present-BiasLimited BandwidthSocial Influencers for Belonging

These can be incorporated into Smart Design of Programs, Servicesand Products and leveraged, to maximize impact

Just as development, health, education is co-produced, so isKnowledge:

Becoming Co-Generators of Knowledge

Conclusions

Getting inside the head and heart of the human being revealsthe Universal Principles of :

Present-BiasLimited BandwidthSocial Influencers for Belonging

These can be incorporated into Smart Design of Programs, Servicesand Products and leveraged, to maximize impact

Just as development, health, education is co-produced, so isKnowledge:

Becoming Co-Generators of Knowledge