Global Poverty and Social Policy: The Cognitive Costs of Scarcity and Their Policy Implications

• Xinyu Ju

  Author

Poverty hollows out more than bank accounts. It also wears away the capacity to concentrate, deliberate, and choose. Working from scarcity psychology and cognitive-load theory, this paper traces how deprivation degrades attention, executive function, and choices with long horizons, and then asks how far existing social programs can absorb these harms. The starting point is the account offered by Mullainathan and Shafir, in which having too little captures a finite stock of mental bandwidth and leaves people torn between firefighting today's emergencies and planning for tomorrow, which is the psychological engine of the poverty trap. Evidence from several countries then shows how these loads pile up for the poor in work, schooling, and health care, and how inequality hands them on to the next generation. Reviewing cash transfers, simpler administration, and design that respects mental limits, the paper contends that policy should move beyond moral exhortation toward cognitive friendliness. Governance of poverty, it concludes, needs cognitive science built in, pairing material aid with psychological support so that help compensates less and empowers more.

• JEBH000018.pdf