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​The Story of the 2015 World Development Report: Mind, Society, and Behavior

Varun Gauri's picture

English settlers to the New World believed that the climate of Newfoundland would be moderate, New England would be warm, and Virginia would be like southern Spain. These beliefs were based on the seemingly common sense view that climate is much the same at any given latitude around the globe.
 
What is striking is that these views persisted despite mounting evidence to the contrary. As late as 1620, after 13 years in the settlement, residents in Jamestown, Virginia, were still trying to import olive trees and other tropical plants, perhaps inspired by Father Andrew White, who had assured them that it was “probable that the soil will prove to be adapted to all the fruits of Italy, figs, pomegranates, oranges, olives, etc.” Eventually, the English settlers did adjust their mental models about North American climate. The accumulation of scientific data, combined with personal experience, was undeniable. But the adjustment was slow and costly, in terms of both money and lives lost.

Why did settlers continue to believe that each cold year in Virginia was anomalous, and that orange and fig trees would flourish soon enough? Did they seize on every bit of evidence confirming their views—the lone orange tree that survived the season—and discard contrary evidence? Were they so afraid of ridicule that they could not deviate from social norms about what crops to cultivate? Did their mental models of the world have such a grip on their minds that alternative agricultural ideas were unthinkable?
 
The Jamestown episode took place in the distant past, but surprising and seemingly “irrational” economic choices like that one can be found anywhere. Seaweed farmers in Indonesia did not realize that lengthening the height of their seaweed strands increased yields, even though they had been farming for nearly two decades. High school students in the United States did not spend $6 to send their test report to an additional college even though doing so would, on average, generate $10,000 of additional lifetime income. Data entry workers in India paid piece-rate wages procrastinated so much that they lost as much as 18 percent of their incomes. In Kenya and elsewhere, patients did not take their medications they already acquired, and farmers did not apply fertilizer known to increase productivity.
 
The 2015 World Development Report (WDR) documents numerous instances like these. It also shows that there is enormous scope for psychologically and socially inspired polices and interventions—social norms campaigns, educational entertainment, aspirational messages, reminders, new default options, commitment devices—to help people make choices that promote their own interests.
 
Sadly, we ourselves—development professionals—are not exempt from this universal phenomenon. In our survey of World Bank staff, which many staff members were game enough to participate in, the WDR team found that we, too, are susceptible to confirmation bias, sunk cost bias, and other cognitive illusions. In addition, our models of how poor individuals think and behave are sometimes inaccurate.
  
What’s fair is fair, you might say. What about you guys, the WDR 2015 team? What cognitive illusions and biases did you suffer from?
 
Well, to start with, we certainly would have benefited from a commitment device. We should have signed a contract requiring us to produce a blank-verse epic poem singing the praises of neoclassical economics whenever we missed one of our internal deadlines. We likely suffered from confirmation bias, too, and may in places have underweighted evidence contrary to our storyline. I rest in peace, however, knowing that critics will be kind enough to identify those places for us.
 
But perhaps the most challenging bias involved our mental model of “a World Development Report.” In development circles, WDRs have a hoary past, and many of us first encountered them in the halcyon and impressionable days of graduate school. Our mental models of a WDR were reinforced by an elaborate set of social norms and rituals that govern the process of conceptualizing, writing, and producing the report.
 
We did make some explicit choices tweaking the mental model. We chose to write a relatively short report. We updated the design and look of the document to make it more reader friendly. We did not collect standard WDR data (e.g., country-level time series) but rather conducted psychological survey experiments in developing countries and with World Bank staff.
 
But there are other parts of the WDR model that we did not change. It is still a printed book, produced annually, by a newly assembled team that has not previously worked together, targeted to multiple audiences, comprising a comprehensive literature review based on background papers, subject to comprehensive internal reviews, on a topic of both theoretical and practical importance to development. We leave it to the WDR 2016 team, who are writing about the internet, to continue wrestling with the model. 
 

Comments

Submitted by larry prusak on

The very fact that you even wrote seriously about these topic in this report is an event to be celebrated by all of us researchers and consultants who are not "pure" economists… the report is well designed, smart,up to date and provocative(as much as we could expect) and -best of all-it's useful
Who could ask for anything more?

Submitted by Mel on

great blog. the right topic at the right time. The challenge is how to build in those aids to help people make decisions that are in their best interests.

Submitted by Anonymous on

The report is exceptional and should put to rest (hopefully) forever the myth that the free market will solve the problem of equity. The need to change mental models and to provide prompts to help people make choices that will benefit them is well documented. This report also comes under the heading of a "fun" read full of fascinating examples of how we really can change things, if we want to.

Submitted by Anand on

Nice synopsis of the WDR 2015 and its production. Particularly liked the part about singing the blank verse epic poetic tribute to neoclassical economics - personally embarrassing, no doubt, but probably unnoticed by others since you would then have been just part of the chorus at the Bank. Look forward to seeing how the WDR influences our colleagues and their mental models going forward. Old habits (and mental models) die hard.

Submitted by jindra cekan on

Varun and the World Bank team, in our ever-changing world it would be too comforting to hold on to 'true' perceptions to inform our actions. Thank you so much for helping all of us question ourselves and how we think about 'development'!

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