The importance of low discount rates

As DV409 students saw last term, 'high discount rate' behaviour in governance and policy making was a central focus of macro-development economics. However at the macro level, the underlying causes of high discount rate outcomes are still something of a black box (although there is no shortage of theories).

High discount rate behaviour in individuals (or 'self- or impulse- control' problems) provides plenty of handy examples for illustrating the concept, but in the back of my head I have always more or less assumed that high discount rate behaviour of governments should be an instutitional, emergent outcome from the interactions of an array individuals whose issues with self control were no different from those of any other population.

If you beleive that self control problems in individuals are purely genetic (and have little or no epi-genetic or environmental interactions) then that is probably a sensible conclusion. However if high (or low) discount rates in individuals are partially a cultural or learned behaviour, then it is not so clear. At least one recent cultural phenomenon, the Tiger Mother's parenting manifesto, certainly suggests that. Here is another story from NPR on a recent large scale study that illustrates the enormous importance of self control for life success, and how this can be at least partially taught or influenced.

The extent to which low/high discount rate behaviour is genetic, cultural, and/or institutional has important policy implications. We have seen empirical evidence for all three of these mechanisms - what do you think?