The goal of this memo is to better understand how the poor behave in order to create better governmental anti-poverty policies in the Kingdom of Cambodia. To this end, I outline how poor populations make decisions regarding food, health, and education as put forth by Abhijit V. Banerjee and Esther Duflo in Poor Economics. After looking at Cambodia’s poverty data and its Education Strategic Plan for 2014-2018, I will make two recommendations towards reducing secondary-school dropout rates, which is vital for future productive behaviors and economic growth. First, to address the supply-side needs of the education system, I recommend the government double its spending on education, paid for by increased tax revenue collection. Second, to address the financial needs of families with school-age children, I recommend conducting a randomized control trial (RCT) to determine if nonconditional or conditional transfers would present an adequate method for reducing secondary-school dropout rates.
I. Poor Economics, poor policies, and the poor In Poor Economics, Abhijit V. Banerjee and Esther Duflo conclude that the poor behave more rationally than policy-makers often give them credit. The result is governmental policies that misalign with their behavior. In this section, I examine the poor’s behavior towards food, health, and education, and to what extent governments are to blame for poverty.
Poor people behave more like well-calculated consumers than the calorie maximizers…