Waylaid Dialectic

July 23, 2013

Sometimes a reminder is enough?

Filed under: Aid,Development Theory — terence @ 8:10 am

What looks to be a very interesting new NBER paper:

Turning a Shove into a Nudge? A “Labeled Cash Transfer” for Education
Najy Benhassine, Florencia Devoto, Esther Duflo, Pascaline Dupas, Victor Pouliquen

Conditional Cash Transfers (CCTs) have been shown to increase human capital investments, but their standard features make them expensive. We use a large randomized experiment in Morocco to estimate an alternative government-run program, a “labeled cash transfer” (LCT): a small cash transfer made to fathers of school-aged children in poor rural communities, not conditional on school attendance but explicitly labeled as an education support program. We document large gains in school participation. Adding conditionality and targeting mothers make almost no difference. The program increased parents’ belief that education was a worthwhile investment, a likely pathway for the results.

I’m not someone who dismisses the textbook model of humans as rational utility maximisers off hand. Sometimes, we’re close enough for it to be practically useful. And almost always it is a great starting point for thinking. Nevertheless, advances in behavioural economics psychology promise, I think, not only to improve the study of economics and political science, but also to provide all manner of useful insights into aid practice.

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