Pakistan Institute of Development Economics

Aspirations and Behaviour: Future in the Mindset The Link between Aspiration Failure and the Poverty Trap
Publication Year : 2020

The paper looks into how low aspirations are linked to low achievement levels. Supported by evidence from economics, sociology, behavioural psychology, and anthropology, it is premised that aspiration failure among the poor results in their getting caught in the poverty trap. This aspiration failure is a product of the mindset, and the resulting internal constraints, that an individual in a specific socioeconomic and cultural environment has. These constraints are based on the person’s cognitive window, which allows for certain behavioural choices and disallows for others. Looking at the notion of economic rationality, the paper questions its applicability in real life, especially those of the poor having low aspiration levels, narrow cognitive window and bounded rationality. The paper presents a justification for initiatives, embedded in societal norms and values, that aim at empowering the poor by improving their aspirations.