"Small Miracles"-- Behavioral Insights to Improve Development Policy: World Development Report 2015

33 Pages Posted: 20 Apr 2016

See all articles by Allison Demeritt

Allison Demeritt

University of Washington

Karla Hoff

World Bank - Development Economics Group (DEC); World Bank - Development Research Group (DECRG)

Date Written: February 1, 2015

Abstract

One of the most fruitful advances in modern economics has been the introduction of psychological realism into the model of "economic man." The World Development Report 2015 organizes the evidence about how humans actually think and make decisions into a coherent framework useful for designing development policy. This paper elaborates on the three principles of human thinking that constitute the report's intellectual framework: Human thinking is dual process -- automatic as well as deliberative (thinking automatically); it is conditioned by social context and the salience of social identities (thinking socially); and it is shaped by mental models that are socially constructed (thinking with mental models). Behavioral insights create scope for policy interventions that produce "miracles" from the perspective of traditional economics.

Keywords: Social Development & Poverty, Educational Sciences, Inequality

Suggested Citation

Demeritt, Allison and Hoff, Karla, "Small Miracles"-- Behavioral Insights to Improve Development Policy: World Development Report 2015 (February 1, 2015). World Bank Policy Research Working Paper No. 7197, Available at SSRN: https://ssrn.com/abstract=2579892

Allison Demeritt (Contact Author)

University of Washington ( email )

Seattle, WA 98195
United States

Karla Hoff

World Bank - Development Economics Group (DEC) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/khoff

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

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