To what extent is economic behavior determined by culture and to what extent by the economic environment? In an extensive IDB study entitled Saving for Development: How Latin America and the Caribbean Can Save More and Better, the authors consider culture as a possible factor in the region’s abysmally low savings rates. They enter, in the process, into a heated debate that has … [Read more...] about Can Culture Affect Economic Outcomes?
Would you be able to come up with the equivalent of US$400 in an emergency? Many people can’t. A recent survey by the United States Federal Reserve Board reveals that 47% of people in the United States can’t come up with that $400 without selling something or borrowing. That means they may be unable to fix their car or visit a hospital emergency room. They may struggle to pay … [Read more...] about When Emergency Spending is Impossible
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
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
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