Overcoming behavioral obstacles to escaping poverty

Abstract

International development policy is ripe for an overhaul. Behavioral science can help policymakers to spur changes in behaviors that are difficult to explain from a conventional economic perspective and impede economic development. We focus here on two well-documented, often-coinciding psychological phenomena that have particularly wide-ranging implications for development policy: present bias (favoring immediate rewards over long-term considerations) and limited attention. We present a number of general policy recommendations that are informed by insight into these phenomena and offer concrete examples of how the recommendations can be implemented to help low-income individuals improve their lives and reach their long-term goals.