I find this a strong endorsement of Grameen Foundation’s rejection of simplistic technology solutions to meeting the diverse financial needs of the world’s poor, while strongly supporting technology solutions that involve human networks.
On the one hand, to the extent non-intrusive technology obviates the need in accessing financial products for human contact – contact that has the potential to pierce the tunnel and focus clients’ attention on so-called “important but not urgent” matters – it could be a negative influence.
On the other hand, SMS reminders to do things that pay long-terms dividends but would otherwise be neglected while tunneling – like saving small amounts of money or taking ones medication on time – have shown promise.
For microfinance managers, the potential negative impacts of pushing field staff to consistently reach aggressive goals on long-term productivity and even ethical behavior are made manifest.
And like many of the observed impacts in behavioral economics, it is not their existence but their which is most striking and unexpected.
In other cases, the study of behavioral economics provides an alternative explanation of why some things work and others don’t.
In still other cases, it suggests that current thinking and so-called “best practices” are wrong and counter-productive.
Fortunately, behavioral economics gives us some tools to confront that challenge.
It suggests that building insurance into loan contracts – something that is fairly widely practiced even though it is increasingly discouraged – deserves another look. Behavioral economics analysis of scarcity explains and warns against the insidiousness of over-indebtedness, which is a logical consequence of scarcity (particularly for the poorest), especially when access to loans is relatively easy.
Basically, “working overtime” can pay short-term productivity dividends, but those dividends are usually short-lived.
The cumulative impact on workers’ mental bandwidth is one way of explaining why this is so.