Ad­dress­ing the psy­cho­log­i­cal im­pacts of poverty in Nige­ria

Financial Nigeria Magazine - - Contents -

Ap­prox­i­mately 83.5 mil­lion Nige­ri­ans or 42.6% of the population are liv­ing in ex­treme poverty, ac­cord­ing to data pro­vided by the World Poverty Clock. This has earned Nige­ria the ig­no­min­ious la­bel of "the ex­treme poverty cap­i­tal of the world" – a po­si­tion that was held down pre­vi­ously by In­dia.

Nige­ria's poverty time bomb is made man­i­fest in a number of di­men­sions. Preem­i­nently, the poor lack ac­cess to qual­ity health­care. As a re­sult, life ex­pectancy in Nige­ria stands at 53.1 years, com­pared to 80.3 in the United King­dom. Av­er­age number of years of ed­u­ca­tion in Nige­ria is less than half of the 13.3 mean years of school­ing in the UK. Mil­lions of Nige­ri­ans who live be­low the poverty line still strug­gle to have ac­cess to safe drink­ing wa­ter and other im­por­tant ser­vices such as elec­tric­ity.

As damn­ing as the scale of depri­va­tion in Nige­ria is, the psy­cho­log­i­cal consequences of poverty are far worse. The coun­try needs pol­i­cy­mak­ers at the var­i­ous tiers and branches of gov­ern­ment who will be more com­mit­ted to de­fus­ing the 'tick­ing time bomb' of poverty in all of its di­men­sions. But a more fun­da­men­tal strat­egy should fo­cus on the psy­choso­cial com­po­nents of poverty. These in­clude the so­cial, men­tal, and emo­tional fac­tors as­so­ci­ated with be­ing poor.

Stud­ies upon stud­ies have been pub­lished, pro­vid­ing ev­i­dence that poverty is not just a func­tion of one's ma­te­rial con­di­tion. Poverty is also psy­cho­log­i­cal; it af­fects the way the poor think and make de­ci­sions. And based on the ev­i­dence sug­gest­ing the in­ter­re­la­tion of so­cial and psy­cho­log­i­cal fac­tors, the World Bank might need to up­date its def­i­ni­tion of ex­treme poverty merely as a con­di­tion of liv­ing be­low $1.90 per day.

Most peo­ple who are poor have had to deal with a number of psy­cho­log­i­cal dis­tress, in­clud­ing shame, or lack of self-worth. An ar­ti­cle pub­lished by the As­so­ci­a­tion for Psy­cho­log­i­cal Science states that peo­ple who deal with “stres­sors” like low in­come and dis­crim­i­na­tion are highly sus­cep­ti­ble to phys­i­cal and men­tal dis­or­ders as well as low IQ scores. The ar­ti­cle as­serts that the stress­ful cir­cum­stances as­so­ci­ated with poverty de­press cog­ni­tive de­vel­op­ment.

In 2013, El­dar Shafir, Pro­fes­sor of Be­hav­ioral Science and Pub­lic Pol­icy at Prince­ton Univer­sity, and his col­leagues pub­lished the re­sults of sev­eral ex­per­i­ments in Science magazine. They showed that individuals who were pre­oc­cu­pied with money prob­lems ex­hib­ited a de­cline in cog­ni­tive func­tion sim­i­lar to a 13-point drop in IQ. Be­fore Shafir's find­ings were pub­lished, Columbia Univer­sity's cog­ni­tive neu­ro­sci­en­tist, Kim­berly Noble, along with other re­searchers, pub­lished a study in 2012, show­ing that so­cioe­co­nomic sta­tus plays a huge role in brain de­vel­op­ment. In­deed, other stud­ies have shown that lack of ac­cess to books, com­put­ers and other cog­ni­tive stim­uli af­fects the learn­ing abil­ity of chil­dren from poor fam­i­lies.

Poverty also low­ers the will­ing­ness to take risks. This is par­tic­u­larly preva­lent among poor peo­ple in de­vel­op­ing countries. A time pref­er­ence ex­per­i­ment with real pay­off was con­ducted in 2008 to mea­sure dis­count rates for 262 farm house­holds in ru­ral Ethiopia. The dis­count rate was found to be high on av­er­age. In a pub­li­ca­tion by the En­vi­ron­ment for De­vel­op­ment (EfD), the re­searchers stated that when fu­ture re­turns were uncer­tain, the sub­jects were risk-averse and, there­fore, favoured projects with shorter pay­back pe­ri­ods. The farm­ers were less will­ing to in­vest in projects with long-term ben­e­fits.

This ten­dency of poor peo­ple to be riska­verse in their de­ci­sion-mak­ing was also cap­tured in a re­port by Jo­hannes Haushofer, a re­searcher at MIT's Poverty Ac­tion Lab. Ac­cord­ing to him, “Stress makes peo­ple risk-averse, and it makes them more short-sighted, in the sense that they are more likely to make de­ci­sions that ben­e­fit them sooner than in the long term.”

The aver­sion to risk in in­vest­ment de­ci­sions shown by peo­ple liv­ing in poverty has se­ri­ous im­pli­ca­tions. For in­stance, mak­ing in­vest­ment that has long-term out­comes such as ed­u­ca­tion might not nec­es­sar­ily be the im­me­di­ate pri­or­ity of the poor. "For the poor, costs are losses," wrote renowned Is­raeli-Amer­i­can psy­chol­o­gist, Daniel Kah­ne­man, in his sem­i­nal book, "Think­ing, Fast and Slow." The in­fer­ence is that money spent on an item is the loss of another item that could have been pur­chased in­stead. This de­prives them the op­por­tu­nity to earn fu­ture in­comes, thereby fos­ter­ing a feed­back loop that per­pet­u­ates poverty.

The World Bank says it has a dream of a "World Free of Poverty.” In­deed, there are enough re­sources in the world to erad­i­cate poverty. Nige­ria is also well en­dowed to be poverty-free. But with­out un­der­stand­ing the psy­cho­log­i­cal causes and consequences of poverty, pro­grammes de­signed to re­duce pri­va­tion will lack the ef­fi­cacy to pull mil­lions of peo­ple out of the vi­cious cy­cle of poverty.

For any strat­egy tack­ling poverty to be ef­fec­tive in Nige­ria, there are a number of stereo­types about poverty that need to be dis­lodged. The poor need so­cial sup­port, not dis­crim­i­na­tion. Cog­ni­tive neu­ro­science re­search has dis­proved the no­tion that peo­ple are poor because they make poor de­ci­sions or they don't try hard enough. A sim­i­lar mis­con­cep­tion also fos­ters the il­lu­sion that rich peo­ple are smarter and more hard-work­ing. So­cial sup­port for the poor would nec­es­sar­ily pre­clude the in­cli­na­tion of some rich peo­ple who thumb their nose at the poor. Keetie Roe­len, a re­search fel­low at the In­sti­tute of De­vel­op­ment Stud­ies, said pol­i­cy­mak­ers must un­der­stand that "dig­nity and sel­f­re­spect are pre­req­ui­sites in the strug­gle against pri­va­tion."

Help­ing the poor to re­move the weight that poverty has on their cog­ni­tive func­tion will re­move some of the bar­ri­ers to es­cap­ing poverty. This partly re­quires pol­i­cy­mak­ers to pay close at­ten­tion to the cog­ni­tive de­vel­op­ment of chil­dren, es­pe­cially those in poor com­mu­ni­ties. In­vest­ment in ed­u­ca­tional re­sources and proper train­ing of teach­ers needs to be ramped up to im­prove the learn­ing abil­ity of ev­ery Nige­rian child.

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