Development / 02.05.2011

There is a set of people in every country who are called the ‘poor’ and the ‘non-poor’ have quite contradictory assumptions about them. For example, despite ample evidence it is considered politically incorrect to say that the ‘poor’ trade their votes because the entire legitimacy of representative government rests on responsible voting behavior. Yet, the same people often say that the ‘poor’ do not know how to spend their money; they waste their income on inessentials ignoring higher priority needs of food, health and education. Hence, policymakers recommend the ‘poor’ be given ration supplements or food vouchers instead of equivalent cash transfers. The question is inescapable: Are the ‘poor’ rational or irrational? How can the same set of people be rational in one domain and irrational in another?