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The Things We Do: Regret can trip us up- before we’ve even begun

Roxanne Bauer's picture

Few people doubt the merits of pausing to "think things through" before making a decision. Without doing so, we fear we may end up making a decision that leads to harm and misfortune.  However, this process is itself a double-edged sword that can lead us astray.

Boy thinkingWe've all been forced to make tough decisions in life. From career progression and where to live to which route to take on a trip, we navigate life's choices by considering our options and weighing them against each other. In the context of these decisions, we attempt to predict the negative consequences from an action or decision and the likelihood that those consequences will actually occur. 

Regret- we seek to avoid it when we can

In a famous study on Regret Theory, Loomes and Sugden present the idea that in making decisions, individuals not only consider the knowledge they have and the resources at their disposal, but also the likely scenarios that will result from their choices.  They further suggest that the pleasure associated with the results of their choices depends not only on the nature of those results but also on the nature of alternative results. Individuals consider the regret their future selves may feel if they know they would have been better if they had chosen differently. Likewise, they consider the joy their future selves may feel if the consequences of their decisions turn out to be optimal. Thus, both a cause and a consequence of our desire to avoid losses (loss aversion) is our desire to avoid the pain of regret. 
According to researchers, individuals exhibit “regret aversion” when they fear their decision will turn out to be wrong in hindsight. Sometimes, we engage in regret aversion before making a decision, leading us to hem and haw and lose out on opportunities. Other times, we engage in regret aversion after a decision is already made, leading us to hold on to losing assets or undesirable positions because we don’t want to admit our choice was not the best one. Many of the interventions that behavioral economists suggest, such as automatic enrollment, default options, and providing information to consumers, are set up to reduce the ex post regret individuals will face for not doing something that’s in their interest.

Have technology and globalization kicked away the ladder of ‘easy’ development? Dani Rodrik thinks so

Duncan Green's picture

Dani RodrikEconomic transformation is necessary for growth that can lead to poverty reduction. However, economic transformation in low-income countries is changing as recent evidence suggests countries are running out of industrialization options much sooner than once expected. Is this a cause for concern? What does the past, present, and likely future of structural transformation look like? Read on to find out why leading economist Dani Rodrik is pessimistic and what some possible rays of light are. 

Dani Rodrik was in town his week, and I attended a brilliant presentation at ODI. Very exciting. He’s been one of my heroes ever since I joined the aid and development crowd in the late 90s, when he was one of the few high profile economists to be arguing against the liberalizing market-good/state-bad tide on trade, investment and just about everything else. Dani doggedly and brilliantly made the case for the role of the state in intelligent industrial policy. But now he’s feeling pessimistic about the future (one discussant described it as ‘like your local priest losing his faith’).

The gloom arises from his analysis of the causes and consequences of premature industrialization. I blogged about his paper on this a few months ago, but here are some additional thoughts that emerged in the discussion. He’s also happy for you to nick his powerpoint.

Dani identified two fundamental engines of growth. The first is a ‘neoclassical engine’, consisting of a slow accumulation of human capital (eg skills), institutions and other ‘fundamental capabilities’. The second, which he ascribed to Arthur Lewis, is driven by structural differences within national economies – islands of modern, high productivity industry in a sea of traditional low productivity. Countries go through a ‘structural transformation’ when an increasing amount of the economy moves from the traditional to the modern sector, with a resulting leap in productivity leading to the kinds of stellar growth that has characterized take-off countries over the last 60 years.

Simulated Manufacturing Employment SharesManufacturing has been key to that second driver. It is technologically dynamic, with technologies spreading rapidly across the world, allowing poor countries to hitch a ride on stuff invented elsewhere. It has absorbed lots of unskilled labour (unlike mining, for example). And since manufactures are tradable, countries can specialize and produce loads of a particular kind of goods, without flooding the domestic market and driving down prices.

But that very dynamism has produced diminishing returns in terms of growth and (especially) jobs. Countries are hitting a peak of manufacturing jobs earlier and earlier in their development process (see graph). And it could get much worse – just imagine the impact if/when garments, the classic job-creating first rung on the industrialization ladder, shift to automated production in the same way as vehicle production.

Quote of the Week: Hélder Pessoa Câmara

Sina Odugbemi's picture

Hélder Câmara“When I give food to the poor, I am considered a saint.  But when I ask why they are poor, I am called a communist."

Hélder Pessoa Câmara, the Catholic Archbishop of Olinda and Recife, Brazil, serving from 1964 to 1985 during the military regime of the country. He was an advocate of liberation theology, and is remembered for the above aphorism.

Quoted in the Financial Times on June 20, 2015, "A rock-star Pope puts his faith in science" by David Gardner


You leak, but I brief. Who is the scoundrel?

Sina Odugbemi's picture

Secret meetingJames Callaghan, Labor Party Prime Minister of Great Britain (1976-1979), is reported to have quipped: “You leak, but I brief”. In other words, while the politician that he was addressing leaked official documents to the media (a wrong, probably illegal move) he merely briefed the media. His practice, he was implying, was less blameworthy. The question is: is it?

Leaks of official documents and the leakers involved are in the news a lot these days. Some of these leakers are leaking documents on an epic scale, exploiting the weaknesses of modern electronic document management systems. Documents that in the past you would have had to break into safes in a thousand different locations around the world to access you can now find in a single online repository…if you have the right hacking or document stealing skills. While in the past a leaker would send a single document by mail to the editor of a leading newspaper, now we are getting thousands of pages stolen and shared all at once.

There is a romantic, Hollywood view of the epic leakers, and movies are also being made about them, usually hagiographies. The epic leakers are seen as heroic figures, doughty champions acting in the overall public interest. Perhaps. I have no doubt that there are leakers who are genuine whistle blowers, determined to expose wrong doing by public officials. But one also suspects that some of these leakers are complexly motivated individuals. And some of the epic leakers are egomaniacs who fancy themselves as world-historic figures.

Weekly wire: The global forum

Roxanne Bauer's picture

World of NewsThese are some of the views and reports relevant to our readers that caught our attention this week.

How the pace of technological progress is redrawing the political map
From power stations to factories, thermostats to smartphones, information to entertainment, the world is driven—and controlled—by digital technology. So it's no surprise that political and economic success, for businesses and nations, depends on how current they are with advances in technology. That's why Bhaskar Chakravorti and colleagues at the Fletcher School have created the Digital Evolution Index, a first-of-its-kind map of how, where and at what speed the use of digital technologies is spreading across the globe.

Global MPI 2015: Key findings
Oxford Poverty & Human Development Initiative
The Global Multidimensional Poverty Index (MPI) provides a range of resources. The Global MPI was updated in June 2015 and now covers 101 countries in total, which are home to 75 per cent of the world’s population, or 5.2 billion people. Of this proportion, 30 per cent of people (1.6 billion) are identified as multidimensionally poor. In June 2015, our analysis of global multidimensional poverty span a number of topics, such as destitution, regional and sub-national variations in poverty, the composition of poverty.

Measuring public diplomacy in a time of global information competition

CGCS's picture

Twiplomacy's World Leaders on Twitter data visualised as a networNicole Bailey is one of the ten 2015 Milton Wolf Emerging Scholar Fellows, an accomplished group of doctoral and advanced MA candidates selected to attend the 2015 Milton Wolf Seminar. Their posts highlight the critical themes and on-going debates raised during the 2015 Seminar discussions. Here, Bailey discusses the pros and cons of measuring elite and grassroots public diplomacy efforts.

The annual Burson-Marsteller Twiplomacy Study highlights the importance of Twitter to modern public diplomacy. It recognizes that influence is much more than the sheer number of a leader’s followers and tweets and admits that quantifying influence in the form of “reach” is a massive challenge. Quantifying reach, and thereby evaluating communication “success,” is one of the greatest foreign policy challenges of the digital age—one that is not exclusive to Twitter (or to social media), but rather applies to all communication platforms.

Crocker Snow, Jr. defined public diplomacy as something that “traditionally represents actions of governments to influence overseas publics within the foreign policy process [but] has expanded today—by accident and design—beyond the realm of governments to include the media, multinational corporations, NGO’s, and faith-based organizations as active participants in the field (Snow, Jr., Crocker, 2005).” For the purpose of this piece, I will focus on public diplomacy as practiced by governments to influence multiple audiences overseas. As a result of new communication and media technologies, conflicting accounts are easier than ever to produce and consume. Therefore, one of the continuing themes of the 2015 Milton Wolf Seminar was the challenge of successful strategic messaging in a time of global information competition.

Media (R)evolutions: Where people get their news depends on their age

Roxanne Bauer's picture

New developments and curiosities from a changing global media landscape: People, Spaces, Deliberation brings trends and events to your attention that illustrate that tomorrow's media environment will look very different from today's, and will have little resemblance to yesterday's.

We have known for years that people are getting their news from an increasing array of sources -- from traditional print and radio to internet and social media. How people consume news, moreover, varies a great deal from country to country.  In many developed countries television and online news are the most frequently accessed sources, while print newspapers have declined significantly. In contrast, newspapers are thriving in some middle- and low-income countries where both print and online circulations are popular. Social media is also growing as a source for news, but is doing so unevenly

However, the state of news consumption looks even more interesting- and trend lines emerge- when generational differences are considered. With age segmentation, we can see that online news is the most popular source for young people aged 18-24 who have grown up with the Internet, while TV is most popular with adults older than 55.  This is important to note because current estimates from the United Nations Population Fund indicate that there are approximately 1.8 billion young people between the ages of 10 and 24 in the world, and many of them live in developing countries where mobile devices that provide access to online news are increasingly common.

Main Source of News by Age

‘Orderly traffic’ as a governance measure: a suggestion

Suvojit Chattopadhyay's picture

Traffic in IndiaMeasuring good governance can be tricky, but 'orderly traffic' can be used as an indicator since it offers insights beyond its limited definition.

As hard as it is to define ‘governance’, we have plenty of indicators to measure its quality: quality of key public services, extent of corruption, ease of doing business, etc. One of the challenges with these indicators is the distance between the process and outcomes, in particular, the assumptions involved in the translation of certain process into tangible outcomes. It follows that by mixing up indicators for processes and outcomes, we risk, well, measuring what doesn’t matter, and not measuring what does matter.

So as the title of this post suggests, could ‘orderly traffic’ be a good measure?

A familiar context: I live in Nairobi (and prior to that, in Delhi) and spend a considerable time waiting in traffic. What often makes traffic a problem is a complete lack of coordination amongst motorists on the road. However, I don’t think the onus of coordination at an intersection should rest on motorists – there are traffic lights or traffic police whose job it is to enforce discipline to ensure orderliness on the road. In many cities though, this is plain theory. In reality, traffic lights may not exist, or be broken; the traffic police may be absent, or just be incompetent. Motorists joust with each other every day and often end up creating gird-locks that hold everyone up. Please note that I am not talking about slow traffic caused purely due to long stops at intersections waiting for the lights to change. I am specifically concerned with the ‘orderliness’ of the flow. People waste time, fuel and a lot of their good humour (unless you are in a zen state) when they are in these gird-locks. It is usually more than evident to everyone whose fault it is and what the solution should be – and that usually only serves to raise tempers on the road. On days when the traffic flows smoothly, everyone seems happier. Zipping home after work is often the high point of the day.

Shades of grey in the global green movement

Leszek J. Sibilski's picture

Portrait of elderly man in Bhutan"Each new generation is reared by its predecessor; the latter must therefore improve in order to improve its successor. The movement is circular." - Emile Durkheim
How are Ban Ki-moon, Secretary-General of the United Nations, Jim Yong Kim, President of the World Bank Group, Christiana Figueres, Executive Secretary of the UN Framework Convention on Climate Change, Bill Mckibben, Pope Francis, and Al Gore alike? The answer is very simple: they are part of a 60+ cohort, which includes baby boomers and their predecessors. And they are all very effective and passionate about how to tackle the biggest threat of our times: climate change.
I vividly remember that the first person who drew my attention as a child to the environment was my grandfather who was a small farmer in my native Poland. Around twenty-five years ago, during my first visit to Siberia, tribal seniors raised the issue of the melting of the “eternal ice” as well. Neither my grandfather nor the seniors were highly educated, but they were able to observe the rapid changes in their own environment. Despite this, we did not heed their concerns as they did not possess academic credentials. Now that over five thousand researchers have agreed that climate change is occurring, we are suddenly starting to pay attention.
Older adults constantly address the issues involved in global warming to Millennials, youth or even children, fully aware that their generation’s irresponsible behavior contributed immensely to the current state of the Earth. But why exclude the culprits? What happened to resocialization and second chances? Even James Madison was aware of generational responsibilities when he stated: “Each generation should be made to bear the burden of its own wars, instead of carrying them on, at the expense of other generations.”
The baby boomers and the silent generation are reaping the benefits of the “longevity dividend”. Why don’t we start working together towards the survival of our kind not only as preachers, but also in the trenches of the global climate change movement?  Members of the grey generations are often bold, skilled, experienced, financially independent, and in most cases, are very active and sensitive to social inequity. As the old saying goes: the funeral shroud has no pockets. It is in their best interest to be part of this movement.

Quote of the Week: Ngozi Okonjo-Iweala

Sina Odugbemi's picture

Ngozi Okonjo-Iweala“I am misfit and a happy misfit.”

- Ngozi Okonjo-Iweala, a world renowned Nigerian economist currently serving as Finance Minister of Nigeria. She is credited with developing reform programs in Nigeria that helped improve governmental transparency and stabilzing the economy.  Previously, she worked for the World Bank, including several years as one of its Managing Directors (October 2007 – July 2011). 

As quoted in the Financial Times on June 5, 2015, Lunch with the FT: Ngozi Okonjo-Iweala, by William Wallis