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Beyond Fatalism: an Empirical Exploration of Self-Efficacy and Aspirations Failures in Ethiopia

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  • Tanguy Bernard

    (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)

  • Stefan Dercon
  • Alemayehu Seyoum Taffesse

Abstract

Fatalism is considered pervasive, especially in many poor communities. In this paper, we explore whether fatalistic beliefs have implications for the attitudes and behavior of poor rural households toward investment in the future. To explore the idea of fatalism, we draw inspiration from theories in psychology focusing on the role of locus of control and self-efficacy and also from the theoretical framework of aspiration failure as developed in recent economic literature. Using survey data from rural Ethiopia, we find evidence of fatalistic beliefs among a substantial group of rural households, as well as indicators consistent with narrow aspirations gap and low self-efficacy. We also find that such beliefs consistently correlate with lower demand for credit, in terms of loan size, repayment horizon, and productive purposes.
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Suggested Citation

  • Tanguy Bernard & Stefan Dercon & Alemayehu Seyoum Taffesse, 2019. "Beyond Fatalism: an Empirical Exploration of Self-Efficacy and Aspirations Failures in Ethiopia," Working Papers hal-02146221, HAL.
    • Handle: RePEc:hal:wpaper:hal-02146221
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