The Role of Psychological Capital in Shaping Challenge Preference During Political Insecurity: Evidence from the D.R. Congo

This study examines whether Psychological Capital (PsyCap)—a composite of hope, self-efficacy, optimism, and resilience—mediates the effect of perceived insecurity on individuals’ willingness to engage in challenging tasks. Using a randomized lab experiment in Goma, Democratic Republic of Congo, we show that priming insecurity significantly reduces the likelihood of choosing a demanding but rewarding task. Crucially, mediation analysis reveals that over 95\% of this effect operates through diminished PsyCap, indicating that insecurity primarily erodes psychological resources rather than directly altering preferences. We further find that insecurity impairs task performance (increasing completion time), again mediated by PsyCap. These results hold after controlling for mood, time preferences, and risk aversion. Our findings highlight insecurity as a psychological constraint on agency, reducing both motivation and effort capacity. They also suggest that interventions bolstering PsyCap could mitigate the hidden economic costs of insecurity, particularly in conflict-affected settings.