{"id":70346,"date":"2022-06-23T15:36:00","date_gmt":"2022-06-23T19:36:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=70346"},"modified":"2022-07-05T14:55:53","modified_gmt":"2022-07-05T18:55:53","slug":"vicious-cycle-of-poverty","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/","title":{"rendered":"How to Break the Vicious Cycle of Poverty"},"content":{"rendered":"\n<p>Why is it so hard to get out of poverty? What is the key factor that keeps people stuck in the poverty trap? <\/p>\n\n\n\n<p>Poverty is an insidious trap that is extremely difficult to escape. Poor people are so focused on stretching their limited resources that they simply don&#8217;t have the time or energy to think about anything else. According to Esther Duflo and Abhijit Banerjee, the authors of <em>Poor Economics<\/em>, one way to break the vicious <a href=\"https:\/\/www.shortform.com\/blog\/what-is-the-cycle-of-poverty\/\">cycle of poverty<\/a> is to give the poor easier choices. <\/p>\n\n\n\n<p>Here&#8217;s how lack of choices keeps people in the poverty trap. <\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-poor-need-easier-choices\"><strong>The Poor Need Easier Choices<\/strong><\/h2>\n\n\n\n<p>Wealthy people living in wealthy countries have many <a href=\"https:\/\/www.shortform.com\/blog\/making-hard-decisions\/\">difficult decisions<\/a> made for them, which benefits them because they then don\u2019t have the opportunity to <a href=\"https:\/\/www.shortform.com\/blog\/make-bad-choices\/\">make poor decisions<\/a>. Their water is purified, their healthcare providers are highly trained and closely regulated, their foods are fortified with key nutrients and regulated to ensure they\u2019re safe, their assets are protected, they have money set aside for the future through Social Security or other financial institutions, and so on.&nbsp;<\/p>\n\n\n\n<p>The poor have none of these things. They have to purify their own water, figure out ways to save for the future outside of typical financial institutions, make complicated decisions about their healthcare, and more. Such decisions are difficult for anyone to make, but especially for the poor, who feel the constant pressure of a lack of resources, information, and basic economic security.&nbsp;<\/p>\n\n\n\n<p><strong>Duflo and Banerjee suggest that one practical way to alleviate the vicious cycle of poverty is to make these decisions easier for the poor.<\/strong> One way to do this is by ensuring default options are good. If tasty cereals are fortified and made readily available, it\u2019ll be easier for the poor to get critical micronutrients into their diet. Referring to Richard Thaler and Cass Sunstein\u2019s book, <a href=\"https:\/\/www.shortform.com\/app\/book\/nudge\"><em>Nudge<\/em><\/a>, Banerjee and Duflo propose a second way to make good decisions easier for the poor: Nudge them toward the right choices. For example, savings accounts could be structured to encourage deposits and discourage withdrawals.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Studies Cited in Support of Nudges Can\u2019t Be Reproduced<\/strong><br><br>Duflo and Banerjee suggest that nudges are an effective way to get the poor to make better choices. Nudges have been proposed in the field of behavioral science as an effective way to lead people to unconsciously make better choices.&nbsp;<br><br>Nudge Theory is founded on the idea that we make decisions on the basis of <a href=\"https:\/\/www.shortform.com\/app\/book\/nudge\/part-1#common-biases\">rules of thumb and biases that we don\u2019t account for<\/a>. By presenting choices in ways that exploit these unconscious biases (in other words, by nudging), policymakers can improve people\u2019s lives without restricting their freedom.&nbsp;<br><br>The entire field of behavioral science has come under scrutiny since the publication of Duflo and Banerjee\u2019s book, however. Researchers found that a majority of the results of studies in the behavioral sciences can\u2019t be reproduced. When the results of a study can\u2019t be reproduced, it undermines the credibility of its conclusions. <a href=\"https:\/\/replicationindex.com\/2017\/02\/02\/reconstruction-of-a-train-wreck-how-priming-research-went-of-the-rails\/\">Nudge theory was one of the areas of behavioral science most undermined by this replication crisis.<\/a><br><br>Perhaps, then, the decisions of the poor are not as likely to be improved by nudges as Duflo and Banerjee suggest. While this undermines some of their advice for dealing with the factors affecting poverty, it doesn\u2019t undermine the authors\u2019 analysis of those factors.&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Why is it so hard to get out of poverty? What is the key factor that keeps people stuck in the poverty trap? Poverty is an insidious trap that is extremely difficult to escape. Poor people are so focused on stretching their limited resources that they simply don&#8217;t have the time or energy to think about anything else. According to Esther Duflo and Abhijit Banerjee, the authors of Poor Economics, one way to break the vicious cycle of poverty is to give the poor easier choices. Here&#8217;s how lack of choices keeps people in the poverty trap.<\/p>\n","protected":false},"author":7,"featured_media":53888,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[81,24],"tags":[661],"class_list":["post-70346","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","category-society","tag-poor-economics","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to Break the Vicious Cycle of Poverty - Shortform Books<\/title>\n<meta name=\"description\" content=\"Poverty is an insidious trap that is very hard to escape. One way to end the vicious cycle of poverty is to give the poor easier choices.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Break the Vicious Cycle of Poverty\" \/>\n<meta property=\"og:description\" content=\"Poverty is an insidious trap that is very hard to escape. One way to end the vicious cycle of poverty is to give the poor easier choices.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/\" \/>\n<meta property=\"og:site_name\" content=\"Shortform Books\" \/>\n<meta property=\"article:published_time\" content=\"2022-06-23T19:36:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-07-05T18:55:53+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/s3.amazonaws.com\/wordpress.shortform.com\/blog\/wp-content\/uploads\/2021\/11\/poor-children-in-india.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1147\" \/>\n\t<meta property=\"og:image:height\" content=\"706\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Darya Sinusoid\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Darya Sinusoid\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/\"},\"author\":{\"name\":\"Darya Sinusoid\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/0421cce75bc249b11e2517b3a91f9c46\"},\"headline\":\"How to Break the Vicious Cycle of Poverty\",\"datePublished\":\"2022-06-23T19:36:00+00:00\",\"dateModified\":\"2022-07-05T18:55:53+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/\"},\"wordCount\":578,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2021\/11\/poor-children-in-india.jpg\",\"keywords\":[\"Poor Economics\"],\"articleSection\":[\"Economics\",\"Society\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/\",\"url\":\"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/\",\"name\":\"How to Break the Vicious Cycle of Poverty - Shortform Books\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/vicious-cycle-of-poverty\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2021\/11\/poor-children-in-india.jpg\",\"datePublished\":\"2022-06-23T19:36:00+00:00\",\"dateModified\":\"2022-07-05T18:55:53+00:00\",\"description\":\"Poverty is an insidious trap that is very hard to escape. 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