How past experiences prevent us escaping poverty traps
When our past blinds us to future opportunities.
Sometimes people are stuck in poverty traps because there are no options to escape the situation - but not always. What if our past blinds us to future opportunities? How can we remedy this?
When we believe our actions make a difference to our future, we invest more actively in things that help us. This our ‘perceived contingency’ and it’s a powerful mindset to help navigate and escape difficult situations.
But we also have the opposite, ‘non-contingency’, and this can be a challenge for poverty reduction. Non-contingency is when an individual perceives outcomes as disconnected from their actions. This is particularly relevant in complex scenarios, like African smallholder farming.
Farming is very hard to predict for African smallholders. It depends on unpredictable weather, draws on varying levels of input quality, and has shocks from pests, diseases and volatile markets. These features make it hard to know where you made the right choices, and difficult to tell how your choices led to the end result.
For example, if I invest in expensive high-quality seed but return a poor harvest, was the seed was damaged? or counterfeit? Or was the fertiliser poor quality? Or seasonality? Or a combination of these?
Sure, we would have theories of what happened, but not the complete picture. Instead, we might feel that our actions are irrelevant - that the outcome happens regardless of whether we plant high-quality seed, etc.
And what happens is that farmers who experience this non-contingency become more cautious and invest less. It shows economic behaviours are influenced by perceptions of control, and these perceptions are altered by experience.
This is important. It means that individuals who have fallen into difficult situations might have options around them to help, but their experience prevents them from seeing the potential of these opportunities. It could mean they remain in poverty traps, despite options to escape.
So yes, we need better material technologies for farmers (seeds, inputs, etc.) but we also need to consider the psychological factors we can address to empower farmers to see these options as useful.
The good news is that we can build perceptions of contingency and help farmers see the options around them.
One approach would be educational programmes and drawing on community networks to show the role of improved practices on agricultural outcomes. When farmers see their neighbours prosper through specific actions, they might view their environment as contingent and within their control.
Another is policies to reduce the actual risks that lead to perceived non-contingency (e.g. insurance / subsidising inputs). By reducing the real unpredictability in their environment, we can shift perceptions from non-contingency to contingency. We can help those those in poverty identify ways to escape the situation.