Economists are used to the idea that intervening in concrete ways — spending on development projects, for example, or on social services — can improve outcomes. But what about psychological interventions? Is it possible to make people wealthier simply by helping them feel better? What is the connection between psychotherapy, or pharmaceutical treatments, and wealth accumulation? This is a new branch of economic research, and the results are by no means definitive. Yet these investigations are especially important for development economics. In poor countries, people may be especially likely to suffer from trauma, given circumstances…
