Paper short abstract:

I address policy implications of aspiration traps to discuss under which conditions this behavioural approach can help to improve well-being and empowerment. There is a case for policy interventions that can enlarge subjective opportunity sets, but these must address material poverty and inequalities as well.

Paper long abstract:

This paper proposes a critical discussion of the recently emerging aspiration (traps) literature. The main idea of this field is that inequality and poverty can influence decision-making through social, cognitive, and psychological processes, making individuals aspire to lower goals than to those that serve their interest best. It offers potential improvements of research and policy-making because it helps to understand individual behaviour better, but at the same time bears the risk of wanting to correct individual life goals, aspirations, and decision-making. Indeed most contributions seem to imply that policy interventions should aim at correcting or avoiding too low aspirations and aspiration traps.

I approach this dilemma by discussing under which conditions insights from this research can support well-being and empowerment. I oppose 5 different perspectives on the welfare implications of policy interventions addressing aspirations: the standard desire-fulfilment criterion and its behavioural extensions, a hedonistic perspective, Sugden's opportunity criterion, Roemer's equality of opportunity and Sen's capability approach. I conclude that psychological and cognitive processes can only be understood and addressed when their analysis is socially grounded and embedded in the respective environment, and as part of a policy mix. Behavioural approaches to development should not give the impression that poverty is not primarily an issue of unequal resources and opportunities.