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WORLD BANK / FINANCIAL BEHAVIOR
STORY: WORLD BANK / FINANCIAL BEHAVIOR
TRT: 1.58
SOURCE: WORLD BANK
RESTRICTIONS: NONE
LANGUAGE: ENGLISH /NATS
DATELINE: 19 NOVEMBER 2014, WASHINGTON, DC /FILE
2013, WASHINGTON, DC
1. Rack focus, World Bank Group signage
2011, INDONESIA
2. Med shot, woman buying vegetables and exchanging money
2014, KINSHASA, DEMOCRATIC REPUBLIC OF CONGO
3. Med shot, man depositing money into a bank
4. Close up, calculator
2011, LAOS
5. Med shot, woman buying goods
2014, KINSHASA, DEMOCRATIC REPUBLIC OF CONGO
6. Med shot, man buying fruit
19 NOVEMBER 2014, WASHINGTON, DC
7. SOUNDBITE (English) Varun Gauri, WDR co-director
“We used to think that individuals assimilate all the information they need to make the best decisions for themselves; they weigh all costs and benefits carefully and decide what’s best. We know that’s not the case-because we know that’s not the case- we should design the environment to help them make better decisions.”
2010, CHINA
8. Med shot, woman buying goods at store
2014, KINSHASA, DEMOCRATIC REPUBLIC OF CONGO
9. Med shot, man depositing money into bank account
19 NOVEMBER 2014, WASHINGTON, DC
10. SOUNDBITE (English) Varun Gauri, WDR co-director
“Development Policy is due for a redesign based on a realistic understanding of human thinking and human behavior. In the traditional understanding, governments set up systems of incentives-taxes, subsidies, rules and then stand back. They assume people will assimilate information about all these incentives and make the best possible decisions for themselves. They will consider all choices, calculate costs and benefits and decide what’s best. Now we know that people aren’t really like that. You and I-we forget things-even important things; we get distracted, we get tired.”
2014, KINSHASA, DEMOCRATIC REPUBLIC OF CONGO
11. Med shot, kids buying food and candy
12. Med shot, man depositing money into bank account
19 NOVEMBER 2014, WASHINGTON, DC
13. SOUNDBITE (English) Varun Gauri, WDR co-director
“So in Kenya, a group of people, a group of researchers gave individuals passbooks labeled Preventive Health and a little lockbox. It created a new mental category, a mental account in their minds and savings for preventive health went up 70%.”
2014, KENYA
14. Wide shot, family sitting in front of house
2013, WASHINGTON, DC
15. Wide shot, World Bank Group building
16. Med shot, people walking in World Bank Group building
2014, KINSHASA, DEMOCRATIC REPUBLIC OF CONGO
17. Med shot, fruit stand
2010, CHINA
18. Med shot, woman buying goods
2014, KENYA
19. Med shot, child sitting down
20. Med shot, child sitting down in chair
21. Med shot, child looking off camera
2014, KINSHASA, DEMOCRATIC REPUBLIC OF CONGO
22. Medium shot, man signing deposit ticket
2014, KENYA
23. Med shot, child eating food
2013, WASHINGTON, DC
24. Wide shot, entrance to World Bank Group building
25. Close up, quote “Our dream is a world free of poverty”
26. Med shot, people walking in World Bank Group building
27. Pan right, World Bank Group building
Development policies need re-hauling to reflect how people's minds really work, a new World Bank study argues. This could help form and realize development goals, including that of breaking poverty cycles from one generation to the next, the study says.
A new World Bank report says that people do not always make deliberate, independent financial decisions based on calculated self-interested. The new study shows people tend to think quickly use mental shortcuts and shared mindsets.
SOUNDBITE (English) Varun Gauri, WDR co-director
“We used to think that individuals assimilate all the information they need to make the best decisions for themselves; they weigh all costs and benefits carefully and decide what’s best. We know that’s not the case-because we know that’s not the case- we should design the environment to help them make better decisions.”
Development policies, argues the study, need to be re-designed accordingly.
SOUNDBITE (English) Varun Gauri, WDR co-director
“Development Policy is due for a redesign based on a realistic understanding of human thinking and human behavior. In the traditional understanding, governments set up systems of incentives-taxes, subsidies, rules and then stand back. They assume that people will assimilate information about all these incentives and make the best possible decisions for themselves. They will consider all choices, calculate costs and benefits and decide what’s best. Now we know that people aren’t really like that. You and I-we forget things-even important things; we get distracted, we get tired.”
The report suggests that people are deeply social and like to cooperate, as long as others do too, so they rely on social networks and norms.
SOUNDBITE (English) Varun Gauri, WDR co-director
“So in Kenya, a group of people, a group of researchers gave individuals passbooks labeled Preventive Health and a little lockbox. It created a new mental category, a mental account in their minds and savings for preventive health went up 70%.”
The study’s authors stress that development agencies should study why people behave the way they do and then design more effective policies.
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