We buy everything we crave at the supermarket; purchase the latest electronic gizmos the minute they appear; and download movies on the internet with abandon. Then we wonder why we have no money for a new car or savings for retirement. What in the world is wrong with us? The truth is that we aren't as morally weak as we think. Science shows that many of us are genetically wired … [Read more...] about Fighting the Spending Demon
Microeconomics and Competitiveness
Helping Latin Americans Save
Sometimes we need a little push to do things that we know are good for us. We find a “gym buddy” to somehow commit to work out. Or we bet money with a friend on who will be able to spend a month without smoking. When it comes to saving, these nudges are also important for many, even if they are not aware of it. Previous posts explored the main reasons why people in Latin … [Read more...] about Helping Latin Americans Save
Want People to Pay Their Taxes? Try a Visit
For years, policy makers in Latin America and the Caribbean have struggled with the immense and chronic problem of tax evasion, which averages close to 50% in many countries and limits governments' ability to spend on schools, hospitals and other critical needs. The problem relates not only to the difficulty of finding tax delinquents. It has to do with the difficulty of … [Read more...] about Want People to Pay Their Taxes? Try a Visit
Five Reasons Why Latin Americans Save Less
Are Latin Americans less prone to save? When compared to regions with similar levels of economic development, why does Latin America fare poorly in terms of saving rates? Though several factors shape saving rates, a few are particularly important in generating these gaps at the household level. In particular, past experiences, psychological traits, and even genes or language … [Read more...] about Five Reasons Why Latin Americans Save Less
Turning a Piggy Bank into a Savings Account in Peru
A piggy bank is a classic childhood favorite, one that has endured for generations. In the last 20 years, many children were encouraged to put away their pennies after getting to know the piggy bank Hamm, a character in the Toy Story franchise. But what may feel like a game to kids is in fact teaching them a very important habit that can set a country on a path to development: … [Read more...] about Turning a Piggy Bank into a Savings Account in Peru