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

)* 40**/%* %# R)'0'****S! $%(,/  2/") $'/(* %"  '/! /(0'    #% **"("/$'' 40'%/ ") "   *//#/$$! /# ! %# #"'/*( / ")/%0/3 )/* 00 *0% * "% ")" /(0'/$"/% ,  **/ ") #%''%2/ H*"/%*; * /" feasible% )'0#'"%4(/") " %'%# #"'/*( /$"'I ")concepts or constructs ")"$0"H'/""/1'")*(,'/#***%$/" 2/")#"'/*(,"(%(,'"% '*/*   /#'$I    ") characterizations %# H'/""/1' ") *( %"$%(* ""/,",'"%#"'/*(,"(%(,'"%'*/* /"1"/%I "*,*H"' 0'%**1 "#%(")/%0/"%$%1*%(1/ $")"/ /$" ")0*$%#")*,'/#* %"$%(*3

II.  PERSPECTIVES  What is Fatalism?  ) /* $%*/ ,' $%"%1*  / 2)" #"'/*( /*   2)") /" /*  '"/$''*#'$%$0"3((/*/")1/%*(/*'/8 2/")#"'/*(7)' A??=B*""; P333 A#"'/*(S*B 0%""/'  %# (/* 1/* #%( ") *"/$" ** %#  **"( %# ,'/#* 2)/$))%' *")"1")/)*00%/" %"$%(2)/$)$%",'" ,##%"% #%8%2' ! "%  ** %# */"/% ,*  % ") '/"/* %#  /##/$'" '/#*/""/%! "% 

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

Perspectives from Outcomes %($%%(/$0*0$"/1! "%")4""")"/"'"*"%$"$"/%  /"* /(0$" % #" %"$%(*! #"'/*( /* H/1'" "% %" (8/ ") $** R/1*"("*S "% ,"" %F* 2'',/3 " ( ")* , ") $* ")" 0%0' #/ #%( (8/ 2'',/)$/ /1*"("* ,$* ") ,'/1! /  ,%  ' "/%' 2!")"*$)/1*"("*/")/#*/,'%2%' %"' "%*//#/$"$)*3-

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% *0$/#/$''! 0%1" ( '  / /1/ '* "% $%*"$" ("' (% '* ")" /H' /(//*)")*//#/$$%#*%(#"*%#")1/%(" (/#%")*3 #/ /1/ ','/1*")"*))*'/""'!/#!,/'/""%/(0$"%)2'',/!")*) 2%' )1/ H"/$"/1*"%,$%(/#%( ,%"%40'%0")2*/"%,"" 2'',/3  %%1! *) 2%'  )1 '/""' (%"/1"/% "% ''%$" *%$* A/$' / $%/"/1%*B"%(% /#),'/#* 0$0"/%*3= *$%*H$!")*"%#,'/#* ,%")/,/'/""%,/,%"0%*/"/1$)2%' ,00"" 3 )*!/#%("/%! $ /"!/*$!%%")*%$*D%00%"/"/*(,1/','A',/"2/")*%($%*"B! ") (/ 40'%/"  , ") " ,$* *) /* $%1/$  ")" ) $"/%* 2/'' %" (8 /##$3

Perspectives from Beliefs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likely"%' "% ")/B D%#%('%2*'###/$$A,'/#*")"%/*%"capable"%$)/1($)B3 ) 0*$)%'%/$' '/""! ,/' / % $%"%' ")% A %    *! ?>NB! **"*")"0#%($,'%240$""/%*(' "%'%2/*0/"/%*AR   %%! -..B3 8/! S/((C(,$8   %'' A??>B **" ")" *'###/$$ /* *"%' /#'$  , ") )%( 1/%(" #%( $)/' )%% 3 @/*)   @"/8%1

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III. FATALISM, ASPIRATIONS FAILURE AND SELF-EFFICACY   /$"/% #//"/% %# ") 2%  R*0/"/%S /* R */ % (,/"/% "% $)/1 *%(")/S3> )2% ")**//#/**%(/(%"" 0#$%2/*)"%""/ /"3 )(/'*%**"*!")/(0'/$/"'!")"*%(##%"2%' ,4" "%'/9 ") */ /(D""3 )*!*0/"/%*)1"2% /*"/$"/1*0$"*3 /*"")future- oriented!/33!")%'*")"$%',*"/*#/ "*%(#""/(3 *0/"/%*%" ,%"/(( /""/#/$"/%3 %4(0'!)0*%(/("%"*%(#%% "% *"/*# )/* /(( /" )   4" *%( ##%" "% $)/1 ")" /(3 )/* 2%'  %" $%"**0/"/%3$%"*"!")%'"%,#%% *$/")#"2%' 0*" *0/"/%3%"'*%")")%' /$"/*0/"/%("*%(*"/*#$"/%/ /"*'#3 )/*!)%21!/* /##"#%(")*0/"/%)' 3$% !")motivators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IV.  DATA AND MEASUREMENT  R-..N!%00%"/"%*"% (% '"%')%*)%' *1,/ /(0'(" /0%%*%#")/%0/"" ,")"/%''1'% $"/1#"" %( AB3 ) *(0' $%1  00%4/("' -O )%*)%' * 0 1/''! /

For each of the following, please tell me which of the two propositions you most agree with:

a. 1: “Each person is primarily responsible for his/her success or failure in life” 2: “One’s success or failure in life is a matter of his/her destiny”

b. 1: “To be successful, above all one needs to work very hard” 2: “To be successful, above all one needs to be lucky”

 - ) *0/"/%*'"  (% ' 2* /"*'#  (//*"  "% "2%  '"* 0 )%*)%' 3 % * %# /"0""/%)%21! ,$*$"/%#")$%1/"** 2%'1/','""))%*)%' '1'! %')%*)%' ) *80"/")*(0'* ,'%23%"")%)")"''*"/("/%*2'*%0#%(  "")/ /1/ ''1'2/")H/1'"N/#$"!*%("/(**"%N*'"*3

 . %*/*"" 2/") % #(/ '"  "% #"'/*(! ,%") H*"/%* $%"*" *$$** ")%) %2 ##%" 2/") *$$** ")%) '$8   #"3 %" ")" / ") (*(" %# '%$*%#$%"%'!(%',%" ,'$#'/*"("*)1,0%0%* A#% 4(0'! 1*%A?>BB3%21!#%%00%**!")H*"/%*,%100 "%, */(0'%)!/1")0%%'*""/!2)/'0%1/ /)'0#'/*/)"*3 ) *'"/ ,/ *0%** 2 (  /#%("/1 ,%" ") 4"" "% 2)/$) / /1/ '*#'/$%"%'%#")/%2#"31''!/")0*"*(0'!K0$"%# ")*0% "*")"POne’s success or failure in life is a matter of his/her destiny”!2)/'K- 0$" %# ")( ,'/1 ")" PTo be successful, above all one needs to be lucky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

Just thinking about your own household circumstances, would you describe your household as: (i) Destitute, (ii) Poor, (iii) Never have quite enough, (iv) Can manage to get by, (v) Comfortable, (vi) Rich (vii) Very rich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

 K %" )%21 ")" '' ") "*"* 0%"  2 '*% 0#%(  */ ") '$8'"  / /$"%   ")" $%(0,'*'"*2%,"/ 3 O*/*'#**** 2'")/ /$"%!2(2''$0",%  #//"/%%#0%1"!,% $" ("/'2'#3 < )**/%/"*'#/*0%" /")00 /43%"")"R/"''%$*%#$%"%'S#*"%")/ "%"(/") *"/'" / /$"%!/33!“Each person is primarily responsible for his/her success or failure in life”3

  /-; %$*%#$%"%' 0%1"

1

.8

.6

.4

.2

0 2 4 6 8 self-reported wealth

Fitted values 95% CI

Predicted probability are based on a logit estimation with dependent variable one's aspirations (proxied by the respondent's belief more in own repsponsability than in fate to improve one's lot), and independent variables age (linearly and squared), gender, literacy status, self-reported wealth and Kebele-level fixed effects. A 95% confidence interval is shown. 

Role models and the Aspiration Window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

 -

Figure 3. Aspiration window (contact with peers outside community) and poverty

1

.5

0

0 2 4 6 8 self-reported wealth

Fitted values 95% CI

Predicted probability are based on a logit estimation with dependent variable whether the respondent ever talks with individuals outside his/her district, and independent variables age (linearly and squared), gender, literacy status, and Kebele-level fixed effects. A 95% confidence interval is shown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

 N )**/%/"*'#/*0%" /")00 /43

 K

Table 1. Locus of Control, Peers and Aspiration windows (3) (2) External locus Difference (1) Internal locus of of control (2)-(3) Total control (own (destiny and (p-value) effort) fate) %((/$"''2/")"'*"% ==3< =>3. =K3K .3O 0*%%"*/ ")P/''IAMB %((/$"''2/")"'*"% OO3- O=3O K?3= .3.< 0*%%"*/ ") /*"/$"IAMB /*""% /%(%")%$AMB

%'(% ''/1*/*(1/''AMB >>3= >>3> >>3. .3=>

%$;2$%(0""/%#%(")")"%'#*/'/$1A-..NB3 

Indicators of Aspiration Gap and Self-Efficacy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

Table 2. Aspiration gap and Locus of Control (3) (2) External locus Difference (1) Internal locus of of control (2)-(3) Total control (own (destiny and (p-value) effort) fate) 3,$%(**$$**#'*%'(% ' N-3> N<3- ==3> .3.. 2/")/#/1* -37%' '/8"%$)(//$%( O<3< ON3N O.3< .3.- /$"/1/" K3*2/''/"%(%1"%/(0%1*"   ->3. -?3? -K3? .3.K %#'/1/ O3*)00%1)00A/*" %# N3K NO3N =K3? .3.. )00%1)00B

%$;2$%(0""/%#%(")")"%'#*/'/$1A-..NB3

 O 1''!")**'"* %*00%"")$'/(")"#"'/*"/$/ /1/ '*'/8'"%,") %*2/")'%2*0/"/%0*!"),(%0%"%*0/"/%#/'*3  ,'-!2'*%0%"%'/8,"2/"''%$*%#$%"%' )00/**3 "/*")*"/8/")"(%")N.M%#")*0% "*/ /$" ")"")2/") )00%1)00!2)/''**")K.M*/ %")2/*3 *0/"2/ *0 0%1"!*$) '1'* %# F)00/**F )1 , %,*1  / ( 1'%0/ $%"/* A* #'%   E!-.. )/* #//*/,* %'%/"(% '2/")$%"%'*!*/,/R)00S%R1)00S* ") 0 "1/,'3?  Figure 4. Happiness and poverty 1 .8 .6 .4 .2 0

0 2 4 6 8 self-reported wealth

Fitted values 95% CI

Predicted probability are based on a logit estimation with dependent variable whether the respondent feels happy or very happy, and independent variables age (linearly and squared), gender, literacy status, per capita, and Kebele-level fixed effects.   

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Q 21: A banker came to you and offered to lend you any amount of money you ask…-. a. 1: How much would you ask for if the loan was payable in 1 year? 2: What would you use this money for? b. 1: How much would you ask for if the loan was payable in 5 years? 2: What would you use this money for? c. 1: How much would you ask for if the loan was payable in 10 years? 2: What would you use this money for?  /<0*"*") /*"/,"/%%#*2*"%")#/*"0"%#$)H*"/%3%" ")" ") (%"* ")" 2%'  , ,%%2  (/ '"/1' *(''! 1 #%  . 0("0/% A*'%#")(,!% /*%)'H'"%./"")"/(%#") *1B3 )*(%"*)%21/$*2/")")'")%#")0("0/% 3-"/* %",'")"'0%0%"/%%#/ /1/ '*ANMB%"/"*" /"8/'%*!--  ")"/"/$***")"/()%/9%40 *!**"/#%#$%((/"("0%,,' "%$"/"/*,%"#"$%%(/$*""*3  Figure 5 : Demand for credit, by length of repayment period



 ,'K!")1'%(%"* (  '/8 "%")*0% "*S'%$*%# $%"%'3 )*'"*")$'!*)%2/")"0*%2%' ,%%2*//#/$"'(% /#)D*)#'*/$%"%'%#)/*D)'/#3 )%*2/")/"''%$*%#$%"%'*//#/$"' (%2/''/"%"8'%#%% "("/"0/% *3

 -. )/* #%('"/% %# ") $ /" (  H*"/% 2* /"   "% (8 $ /" (8" /(0#$"/%* / 0/$/0'/%0"/13 - )/*/*$%*/*""2/")")#/ /")"'%*/9/*H/"*0%*/1"%$)*/'%("/"3@'  S/(A-..

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

Table 3. Fatalism and Borrowing (1) (3) (2) External locus Difference (1) Internal locus of of control (2)-(3) Total control (own (destiny and (p-value) effort) fate) (%",%%2 #%% -.<< -K >>K .3.N (%",%%2 #%<* K.< K.NO K.. .3=N (%",%%2 #%.* K<= K=?? K-O> .3.K

%$;2$%(0""/%#%(")")"%'#*/'/$1A-..NB3

Table 4. Fatalism and Borrowing (2) (2) (3) (1) Internal locus of External locus of Total control (own control (destiny *%#)0%")"/$''% effort) and fate) )%""(/1*"("A/(( /"$%*(0"/%B K3?< K3N? O3KN  /("(/1*"("A#(/(0'("*!%4B O-3>- O.3OO O>3> '%"(/1*"("A $"/%!2,*/**B .K?!%,,/'/"W.3.< %$;2$%(0""/%#%(")")"%'#*/'/$1A-..NB3  *  #") *"0 "%2 *  (% /%%* "*"/ *""! "(/"* %# ") (%"  *0% " 2%'  ,%%2 /# )D*) 2%## '%2/1*"/"  $%%("/$''3  */ ") *( $%"%' 1/,'* * ,#% A!  *H !  ! '/"$!*'#0%" 2'")-K 1/''#/4 ##$"*B!240'% 2)")")(*  *"// /$"%A'%$*%#$%"%'B$%"/,"*"%40'//,%%2//""/%*3 /< )**)%2")"(,%#/ /1/ '*/ /$" ")"")2%' ")%""8'%/#/" 2*%## "%")(3  %,/"*"/("%/** "%$$%"#%")/*$*%/%#") "3-O ) *"/("/% 2*  #% $) %# ") ") 0%0%*  0(" 0/% *; % ! #/1  -K'#0%" 2'")/** /")/***/%*$%"/%*1/,'!"8/%N1'*!/$*// 2'")3 '""/1 *0$/#/$"/%*! / 2)/$) ")  '/ $"%/$' 1/,' /* "*#%(  / (( 1/,'*! / %"$)")#/ /*3 -O /1/ '*2)%*0%  ")"")2%' %""8'%/#/"2*%## "%")((/  ,(% 2/''/ "% *13 * *$)! ")/ *2* 2%'  )1 , "/1   ") 9% 1'* %,*1  ")#% *00%"")*%# %,/"*"/("%3

 N *!   " *3 ) (/' ##$"*! $'$'"  " ") (* %# ") / 0 " 1/,'*!0%" / ,'<3  Table 5. Fatalism and Borrowing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

 > % #"'/*(! 00* "% , '/8  "% #"%/"  $"/%*! " '*" % ") ,*/* %# ") 00" ( #%$ /"3 )/* *$"/% )* 0%1/   0'/(/! '")%) %,*" (0//$' 1/ $ ")" (%*""  ") '1$ %# ") P*0/"/% #(2%8Q "% ") '*/* %# 0%1" (/$*30"/$'!")*'"***"")" 4"' '%$* %# $%"%' $)$"/*  ' 0%0%"/% %# ") *1  0%0'"/%   ( *//#/$"' /#'$ ")/ #" %/" ,)1/%3

VI.  CONCLUSIONS  )/*00)*00'/ ")P*0/"/%*#/'Q#(2%8** /$"")%"/$'2%8 /$%%(/$*!*2''* 2/*0/"/%#%(*%$/'$%/"/1")%"%*" ")%'%# #"'/*(%$%%(/$,)1/%30$/#/$''!2#/ ")"$%$0"**$)*4"''%$*%# $%"%'!'%2*'###/$$ *(''*0/"/%*0)'0"% *" / *%##"'/*(  /"*/(0'/$"/%*#%#"%/" $"/1/"/*!*$)*,%%2/3 )1/ $**"*")"!  *"%% /")/***!#"'/*('%2*") ( #%'%"('%* #%'%*#% 0% $"/100%**3  #$%*!")#/'*"%#"*"*/")00$) '*",'/*)$*''/8,"2 #"'/*(   $"' ,)1/%! / 0" ,$* ")  ,*  % )0%")"/$' *$/%*3 ")(%!$*'/"2%' '2*, /##/$'""%*",'/*)*''")$%$0"*!/$' / #"'/*(   '%$* %# $%"%'! *'###/$$! *0/"/%* 0*   #/'  '' '/8' "% /"$" 2/") $%%(/$ 1/,'* /  )/)'  %%* 23  40'%/ ")* '/8*! 0#,'/40/("'*""/!/*")4"*"%#")/**$) 3$)2%8/* /(0%""! * /" ( *)  '/)" % ") 0%""/' "% /* *'###/$$  D% 2/  *0/"/%* 0* / 2* ")" ''%2 0%% 0%0'"/%* "% "8 (%  1" %# %00%"/"/**2''*$"2%*3*% %//"$$%"/,""%2 *,8/ 1/$/%*$/$'**"((/#%(*0/"/%*#/'37%8%#")/*"!/")#%(%# #/' 40/("!/*%2"8/0'$/")/%0/3

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 - @/*)! 3!   3 @"/8%1 -..3 Y8/'' %("/% / %(,S* '(*!Y (,/  7%8/0*/$%%(/$*..! $'"%#$%%(/$*!/1*/"%#(,/ 3 @! 3A?>>B3P ) $/%**"; )%/*%#*%' %''$"/1%*1"/*(3Q Journal of Economic Behavior and Organization.A-B;OKN3 1*%! 3 A?>B3 /##"/"/ (% /"'/"! 0%2#' %")*!   $)$3  33 #$%"A 3B!*$)2/")")'%$*%#$%"%'$%*"$"!P%'332%8; $ (/$**3 %$8!  2/   C ")(! -..-3 P/' /  $"/$'' *#' )% %# C%' ""/  *8%"/1"/%3 K< **Q!American Psychologist!NBP $%"%'**"(*(% '%#%/9"/%'(%"/1"/%; )%"/$' 1'%0(" 00'/ /(0'/$"/%*Q3Behavioral ScienceK-;=N>3 *8/!)'* 3A-..OB3P*/40$""/%*!QEconometrica!Vol. 72, No. 5!K-?N KN=3 *8/! )'* 3 A-...B3 P$%%(/$ '*/* %# %$/' "$"/%*!Q The Journal of Economic Perspectives!P%'3O!%3K!003<K=3 /'! 2  /$)'@(A-..KBP"2%8*!%$/' /!  $)%'% %0"/%; )*%# 2%(/ */@3QMimeo31 /1*/"3 %%8)E! /'/0!   ,E  A *3BA-..B3 Readings in the Theory of Economic Development!'$82'','/*)*!4#% 3 $%*!@!%*P8/*A-..?B3P)/%*)%' *S1*"("*  *0/"/%* ")%) %$/' "$"/%*; 1/ $ #%(   %(/9  *# %( /  %2$%(%"!Qmimeo3 /''! 3 3! [ %'' ! R3 A?OB3 %$/' /   (/""/%3 2 1; ' /1*/"**3 *)/!@/1! 8%*92/A-..>NK.B3 2%8;**'' % "/%3 '""!R)/'/00A-...B3Institutions, Social Norms, and Economic Development!1** ,'/*)* **%$/"/%! (*" (3 )("%! **'! 8'/' @/  A1999). %*'""/%* 2/") ) %%   "  "% #%( ") 7%'  1'%0(" 0%" -...D. % %1"   1'%0(" A"/%'0%"!")/%0/B! /* ,,!mimeo3 %! P/E !   /$)' 7'"% A /"%*B A-..OB3 Culture and Public Action, "#%  /1*/"**3 %! P/E !   /$)' 7'"% A-..-B3 P'"! H'/"   $$('"/% /  C'%,'/9/7%' Q00*" "<") '%#$%#")"#%") " %#C'%,'/*"/% /%'/*"/% % Globalisation, Growth and (In)Equality, , )' " $(%*!/1*/"%#72/$8!<N$)-..-. ! ,EA??>B3Development Economics!/$"%/1*/"**!/$"%!3R3 ! ,EA-..-B3Y *0/"/%*!%1" $%%(/$)!Yvery preliminary draft3

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 -K  Appendix: Logit estimates for Figures 2, 3 and 4   %$*%#%"%' 00/** %((/$"* %"*/  /*"/$"  .3.N= .3.K. .3.K  A.3.->B  A.3.K-B A.3.OB - .3.. .3... .3...  A.3...B  A.3...B A.3...B C AW2%(B .3N> .3O>- .3.B *$)%%'/ .3->N .3.-< .3OKN  A.3N-B A.3??B A.3--?B '#0%" 2'") .3-? .3>O .3<==  A.3.=OB  A.3.>OB  A.3.?OB  P/''#/4 ##$"* * * *  N !O> !-N N=O  

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