New Approaches in Development

Economics has opened up to the idea that our way of thinking fundamentally influences our economic decisions. Both poverty and affluence can be inherited by internalised thinking patterns. Applying the findings of social psychology, behavioural science and the theory of habituation, one can come up with nudges to dislodge these old mental models and social habits.

The thinking patterns and mental models developed by people, who lived under oppressive regimes have the same potency to linger long after the oppression had been ended – recreating unfreedom in the long run. But the methods recently embraced by development professionals may give a hint as to how these mental models could be dislodged.

“The past 30 years of research in decision making across many behavioural and social sciences have led economists to a stage where they measure and formalize the psychological and social aspects of decision making that many of the foundational contributors to economics believed were important. Empirical work demonstrates that people do not make decisions by taking into account all costs and benefits. People want to conform to social expectations. People do not have unchanging or arbitrarily changing tastes. Preferences depend on the context in which they are elicited and on the social institutions that have formed the interpretive frameworks through which individuals see the world (Basu 2010; Fehr and Hoff 2011).” (World Bank – World Development Report, 2015)

Possible solutions to the problem would emulate the approach of the 2015 World Bank Report by looking for realistic and seemingly minor behavioural nudges to break the vicious cycle and form new habits that are conducive to prosperity and freedom. The Report naturally focuses on the mental models and social habits perpetuating poverty, and argues that impediments to people’s ability to process information neutrally and factually and the ways societies shape mind-sets can be sources of development disadvantage. But it can also be changed.

I would like to argue that the third leg of freedom/democratisation (after economic and political institutions), the free citizen (“democrat”) can be nudged into existence. Once we map out the social thinking (mind-sets), strategies, and mental models these societies continue to use after regime change, we are in a better position to shape them.

The Report considers three areas where our thinking is less than rational and logical: “fast” thinking, social thinking and thinking by mental models. Allow me to quote the Report at length here. As we will see, the following approaches are important when one is to understand the state of a society.

Fast thinking

Since people tend to have access to more information than they can process, we tend to seek shortcuts. There are an unmanageably large number of ways to organise information. Psychologists have long distinguished between two kinds of processes that people use when thinking:

  1. Fast thinking: automatic, effortless, and associative, and intuitive
  2. Slow thinking: deliberative, effortful, serial, and reflective.

We all consider ourselves rational and deliberative all the time – and this fallacy doesn’t help the problem.

At the same time, we dearly protect our thinking shortcuts (and mental models) because of the comfort they provide. The Report discusses framing, mental editing and interpretation as the most usual methods of fast thinking.

The Report notes that when individuals are under cognitive strain, it is even more difficult to activate the deliberative system. Poverty, time pressure, and financial stress all can cause cognitive strain.

Social thinking

“Humans are not autonomous thinkers or decision makers but deeply social animals. We have innate preferences for altruism, cooperation, and reciprocity, and we are strongly affected by the social norms and networks in our communities. We often want to meet others’ expectations of us, and we act on the basis of shared identities.” (World Bank – World Development Report, 2015)

“Social preferences and social influences can lead societies into self-reinforcing collective patterns of behavior. In many cases, these patterns are highly desirable, representing patterns of trust and shared values. But when group behaviors influence individual preferences and individual preferences combine into group behaviors, societies can also end up coordinating activity around a common focal point that is ill-advised or even destructive for the community. Racial or ethnic segregation and corruption are just two examples. When self-reinforcing “coordinated points” emerge in a society, they can be very resistant to change. “(World Bank – World Development Report, 2015)

Thinking by mental models

“Individuals do not respond to objective experience but to mental representations of experience constructed from culturally available mental models. People have access to multiple and often conflicting mental models, and which one they invoke to make a choice depends on the context. Human decision making, therefore, is powerfully shaped by both contextual cues and the past experiences of individuals and societies. Showing people new ways of thinking can expand the set of mental models they draw on and their capacity to aspire and can thus increase social welfare.” (World Bank – World Development Report, 2015)

“When people think, they generally do not draw on concepts that they have invented themselves. Instead, they use concepts, categories, identities, prototypes, stereotypes, causal narratives, and worldviews drawn from their communities. Many mental models are useful; others are not and contribute to the  intergenerational transmission of poverty. Mental models come from the cognitive side of social interactions, which people often refer to as culture. Culture influences individual decision making because it serves as a set of interrelated schemes of meaning that people use when they act and make choices.” (World Bank – World Development Report, 2015)

Unlinking habits from identity

The new approach also provides a tool, useful beyond the study of authoritarianism: Unlinking habits from identity

We all know the dangers of identity politics. When too much of our learned mental habits are regarded as parts of our precious identity, we start to protect them from change. By separating the two, there is more leeway to adaptation and change. By demoting issues of (mental) habits from precious identity to mere habits, we make them changeable. We are free to see them as seeking comfort, familiarity, as informed by laziness and absence of decision, rather than some holy force of identity, determined for us ans shielded from efforts to improve.


(This chapter is a work in progress.) 



6 thoughts on “New Approaches in Development

  1. Pingback: About the Project | Dare To Be Free

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  3. Pingback: The Vicious Cycle of Authoritarian Thinking | Dare To Be Free

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  5. Pingback: How oppressive regimes rob their victims of their sense of agency 1. Terror-bonding | How To Make People Want To Be Free

  6. Pingback: Does The Appetite For Freedom Outlive Economic Depressions? | Meanwhile in Budapest

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