The poverty antidote: Hope is vital to climbing the economic ladder

Published: Wednesday, July 18 2012 9:16 p.m. MDT

New research suggests hope may be just as vital to beating poverty as capital, credit, skills or food.

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For most of her life, Momena had one very humble dream; she wanted to eat three meals a day.

The third child of a day laborer in Bangladesh, by the time she married, Momena's tummy had grown used to just two meals a day. She wanted to do better for her own four children, but her husband fell ill and spent more days recuperating in the one-room shanty the family shared than earning a paycheck. She and the kids took up domestic work, but for decades Momena's dream eluded her.

She was the poorest of the poor — so poor traditional anti-poverty programs couldn't reach her. But these days Momena's eating well. And not only has her nutrition improved, she moved out of the shanty. She now owns four cows, three goats, 22 chickens, 162 square meters of land (she leases about 1,000 more), a rickshaw van, a tube well for safe drinking water and a sanitary latrine.

What changed? Momena found hope.

It sounds like a warm, fuzzy non-explanation, but it's an answer that's being increasingly accepted not only among aid workers, but also among economists. New research suggests hope may be just as vital to beating poverty as capital, credit, skills or food. The evidence is so compelling the American Economics Association and the World Economic Forum both tossed around the idea of replacing gross national product with happiness measures at their annual meetings.

Trapped

For Momena, hope came in the form of two cattle and a mentor from BRAC, one of Bangladesh's most prominent microfinance institutions.

After a few decades working with the poor in Bangladesh, BRAC noticed traditional anti-poverty programs — microfinance, skills training, health care — didn't seem to work for the country's poorest 10 percent, who live on about 50 cents a day. So in the early 2000s, they started pairing ultra poor households with a mentor, who would meet with them on a weekly basis to teach them, not only about health and finance, but also self confidence. Over the course of two years, mentors work with the poor to help them learn to care for an asset, usually livestock, and imagine a better life. To lower stress, BRAC gives families a small stipend to help cover the cost of food.

The program, which has now been replicated by nonprofits in 10 other countries, boasts impressive results. About 98 percent of families graduate from extreme poverty after two years. Six years later, 95 percent have maintained their economic gains.

"I had no hope for myself and my family for a better future," Momena said. "When BRAC … selected me to be a part of their ultra poor program, they gave me the confidence and hope to build a brighter future for my entire family."

Momena was caught in what social scientists call a poverty trap. When people don't have enough to eat, they do not have the energy to work hard enough to improve their economic lot — or so the theory goes. But after studying BRAC's method of working with the ultra poor, MIT professor Esther Duflo, who is known for her scientific approach to anti-poverty methods, believes there's more to it.

If malnutrition were keeping these people in poverty, participants should have spent as much as possible of their new resources on food, Duflo wrote in a series of lectures delivered at Harvard University in May. And they didn't. Instead, Duflo points to mental health.

Potential beneficiaries in West Bengal, where the nonprofit Bandhan implements a program for the ultra poor modeled after BRAC's, showed symptoms of depression, she wrote. More than a third of eligible households were so hopeless they turned down the offer of an asset, saying "they did not trust they could successfully take care of it." After 18 months, people who participated in the program were less likely than those who did not to report symptoms of depression, anxiety or stress.

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