Ed Carr thinks Esther Duflo is mistaken to think that the poor make mistakes, offering as counter evidence work showing male farmers preventing their wives from becoming the primary bread winners. The farmers do this as, were their wives seen to be earning more than them, their (the men’s) status in the community would be challenged and this would likely lead to reduced material welfare. The men’s choices might appear mistaken but once we understand the context they are rational enough.
It’s an interesting example but Carr is the one who is mistaken if he thinks he’s refuting Duflo et al. Mistaken because to Carr’s one example Duflo’s work provides plenty of cases (not chlorinating water for example) where deeper underlying rationality of the sort evident in Carr’s work is very unlikely.
More than that though Carr’s own example has a big ol’ contradiction running through it, which renders it a very poor example for those who might wish to claim we are rational after all.
The problem is as such:
Carr shows that the farmers he researched are choosing something that seems economically irrational (suppressing the earning potential of their wives) but which is actually rational once one considers the incentives they are offered by the informal institutions/norms associated with their communities. Institutions which see farmers loosing status if their wives are earn more than them. Lost of status has a potential land cost and so allowing their wives to earn more makes bad economic sense in the long run. Which is an excellent and interesting insight but one which *does not* afford evidence sufficient for us to conclude that reason has won the day. Does not because the norms themselves (male status being tied to men earning more than women) are profoundly irrational. There’s no good, rational reason, for status to be tied up in him earning more than her, and yet it is.
Sometimes irrational collective outcomes can stem from collective action dilemmas turning individually rational choices into collectively irrational screw ups (i.e. the tragedy of the commons), but it is very hard to see how this could explain the norms driving the actions of Carr’s farmers.
To be clear, Carr’s farmers are hardly unique in this: sexism is quite possibly the most common human cognitive error. And you could find numerous similar examples where I grew up.
And I’m not disputing that their decisions make sense on their own terms. Rather, I’m simply pointing out that the norms (aka informal institutions) shaping their choices themselves appear to be profoundly irrational. Mistaken in other words.