May 19, 2016

The Economics that Really Matter: Hope for Rural Smallholder Farmers

By Jeffrey Bloem, Graduate Research Assistant, Department of Agricultural, Food, and Resource Economics, Michigan State University, and Social Media Ambassador, Global Food Security Symposium 2016

The March 12th edition of The Economist magazine featured an enlightening article about some of the recent trends in African agricultural development. The article began by introducing Jean Pierre Nzabahimana, a “lean” and “muscular” farmer from rural Rwanda. Of Mr. Nzabahimana, who harvested a bumper crop of maize which has allowed him to afford meat twice a month, the article said the following:

Although he remains poor by any measure, he has entered the class of poor dreamers. Perhaps he will build a shop in the village, he says. Hopefully one of his four children will become a driver or a mechanic.

In just these two sentences there are at least three concepts worthy of further consideration. First, experiencing a "good" harvest gives Mr. Nzabahimana the ability to dream, or to hope in a better future. Second, entering the "class of the poor dreamers" spurs the ability to achieve other "good" outcomes—aspiring to build a shop in the village or for one of his children to become a driver or a mechanic. Third, there is at least a conceptual distinction between "the poor" and "the poor dreamers." These are all interesting and perhaps even intriguing concepts to consider, but until “hope” can actually be empirically measured these concepts will remain unverified.  
 
In a similar vein, a widely discussed article published last summer in the journal Science suggested that a multifaceted program caused positive, cost-effective, and lasting impacts on the ‘ultra poor’ in part because it made the participants think that “the future could be better”. Qualifying this idea, the authors of the study—who include Abhijit Banerjee, Esther Duflo, Dean Karlan, and Chris Udry—state, “a much more detailed psychological measurement would be necessary to fully understand this result and its underlying mechanisms.”
 
Dating back to the 1960s and 1970s empirical research in psychology made the first attempts at developing an empirical measurement of hope. Much, if not all, of this work was carried out among university students and in clinical settings in the United States and Europe. Despite the recent intrigue of hope as a potential causal mechanism of poverty reduction, little to no research has been done developing, testing, and validating an empirical approach of measuring hope amongst the rural poor in developing countries.
 
In March of this year, a team of researchers and myself designed, tested, and implemented a detailed psychological-based household survey in rural Mon State, Myanmar, as part of a larger, USAID Burma-funded project investigating rural livelihoods. The survey included four key instruments: An aspirations instrument similar to that of Bernard and Taffesse (2014), the Hope Scale developed by the social psychologist C.R. Snyder, self-efficacy questions similar to that used by Bernard, Dercon, and Taffesse (2011), and a locus of control scale  developed in 1966 by the psychologist Julian Rotter.
 
Theoretical literature in psychology suggests that hope is a function of three essential elements: aspirations (i.e. some sort of meaningful and desired future goals), agency (i.e. the ability—or believe in the ability—to influence aspirations), and pathways (i.e. a visualized causal chain of behaviors linking the present to the future). The economists Travis Lybbert and Bruce Wydick demonstrate this definition in a working paper by highlighting the different uses of the word “hope” in the English language: “The farmer hopes that it will rain tomorrow” and “The farmer hopes to install irrigation tomorrow.” The first statement is devoid of agency and pathways and can be called “wishful hope”; the second statement includes both agency and pathways and can be called “aspirational hope.”
 
Upon receiving the 1979 Nobel Prize in Economics, Theodore Schultz famously stated the following during his acceptance lecture:

Most of the people in the world are poor, so if we knew the economics of being poor, we would know much of the economics that really matters. Most of the world’s poor people earn their living from agriculture, so if we knew the economics of agriculture, we would know much of the economics of being poor.

I’d like to add to this statement. Almost everything that is done in the world is done because of some sort of hope in the future. If we knew the economics of hope, we would know much of the economics that really really matters.
 

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The Global Food and Agriculture Program aims to inform the development of US policy on global agricultural development and food security by raising awareness and providing resources, information, and policy analysis to the US Administration, Congress, and interested experts and organizations.

The Global Food and Agriculture Program is housed within the Chicago Council on Global Affairs, an independent, nonpartisan organization that provides insight – and influences the public discourse – on critical global issues. The Council on Global Affairs convenes leading global voices and conducts independent research to bring clarity and offer solutions to challenges and opportunities across the globe. The Council is committed to engaging the public and raising global awareness of issues that transcend borders and transform how people, business, and governments engage the world.

Support for the Global Food and Agriculture Program is generously provided by the Bill & Melinda Gates Foundation.

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Archive



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