Living in poverty curtails a poor person''s capacity to aspire, according to research by Patricio Dalton, Sayantan Ghosal and Anandi Mani, published in the February 2016 issue of the Economic Journal.
Until recently, the role of such constraints that are internal to individuals in perpetuating poverty has been largely overlooked in the development debate. The new study concludes that interventions to address ''aspiration failure'' can, at the very least, enhance the effectiveness of policies that address material constraints.
Conventional policies for poverty reduction typically tend to focus on relaxing external (material resource) constraints such as lack of credit, poor education or insecure property rights. Largely missing is a focus on internal (psychological) constraints that may cause poverty traps. One example of such an internal constraint is an aspirations failure, defined as the failure to aspire to one''s own potential.
Aspirations positively affect the outcomes that individuals achieve. Empirical evidence gathered across a wide range of countries and settings shows that low aspirations go hand-in-hand with persistent poverty.
Moreover, this link between poverty and low aspirations cannot be fully explained by lack of opportunities or information about pathways out of poverty. Arjun Appadurai (2004) refers to what appears to be a lack of the ''capacity to aspire'' among the poor – which raises the question of whether such aspirations failure is a cause of poverty, or its consequence.
This study provides a conceptual framework linking poverty and aspirations, which shows that it is the latter. The authors outline a framework where higher aspirations help achieve better outcomes – and better outcomes (achieved through higher effort) spur higher aspirations too.
The research builds on the assumption that individuals underestimate this latter channel – that is, how their aspirations may evolve over their lifetime as a consequence of their current effort. It is not that the poor alone suffer from this bias, the rich do too.
But those who are already poor and marginalised, given their low initial wealth and marginal social position, have a lower expected benefit from investing effort to achieve their goals and thus reach their aspirations. In the long run, such an effect lowers the aspiration level of a poor person as well.
Taken together, the implication is that persistent poverty makes it more likely that these internal constraints become self-fulfilling and, in the long run, an independent source of disadvantage for poor persons in their own right. Poverty lowers the aspirations level of a poor person, relative to what they could optimally aim to achieve. This is what the researchers refer to as an aspirations failure. In this sense, poverty curtails a poor person''s capacity to aspire, in the spirit of Arjun Appadurai.
The key policy implication of the new study is that interventions that address aspiration levels can, at the very minimum, enhance the effectiveness of policies that address material constraints. Moreover, under some conditions, pro-poor policies aimed at raising aspirations can enhance welfare, without any change in material circumstances.
These theoretical implications are substantiated by an increasing body of empirical work. Research by Lori Beaman and colleagues (2012), for example, finds that in India, the exposure to female leaders in local government has raised both the aspirations and educational attainment of girls significantly, despite no change in the resources available for their education.
Likewise, Tanguy Bernard and colleagues (2014) find that poor rural Ethiopians increased their aspirations and assets six months after they watched a documentary about people from similar communities who had succeeded in their business.
All in all, the role of constraints internal to individuals in perpetuating poverty has been largely overlooked in the development debate. The World Development Report (2015) provides an extensive review of the evidence underpinning this new way of looking at pro-poor policies. The new study provides the theoretical underpinnings of such a promising research and policy agenda.
''Poverty and Aspirations Failure'' by Patricio Dalton, Sayantan Ghosal and Anandi Mani is published in the February 2016 issue of the Economic Journal. Patricio Dalton is at Tilburg University. Sayantan Ghosal is at the University of Glasgow. Anandi Mani is at the University of Warwick.