Nudging human development

Buenos Aires Times

These findings illustrate that poverty is not associated with particular motives, skills, character or behavioural inclinations.
Almost a decade ago in 2008, Richard Thaler and Cass Sunstein published Nudge, a book dedicated to studying how we make choices, and exploring the existing gap between human intentions and their actions. In the period between this publication and the awarding this year of the Nobel Prize in Economics to Professor Thaler, the use of behavioural science insights to inform public policy has grown exponentially, both in terms of its scope and reach.

The idea that psychology offers key insights for effective policymaking is not recent and can be traced back at least 100 years ago. However, more recent research has found systematic evidence that challenges classical assumptions about human behaviour and decision-making, including the notion that we are rational, perfectly informed and hold stable and internally consistent preferences.

Briefly, behavioural science research shows that, since we have scarce cognitive resources, most of the time we behave irrationally and in a predictable way. Contrary to our assumptions, we frequently rely on shortcuts, mental biases and worldviews to make automatic, effortless, intuitive and associative decisions. Mental models allow us to filter, process, and interpret information that guides action, but often inaccurately. In the words of Dan Ariely, we are predictably irrational.

These findings on human behaviour have brought about a myriad of policy implications for human development issues such as social welfare, education, child protection and development, and criminal justice among many others. In most cases, the findings show meaningful impacts that can be made with relatively simple and costeffective tweaks to existing policies, such as modifying the way in which is information is presented.

One of the main contributions of behavioural science has been the understanding of how the context in which a person functions is central to policy effectiveness. In the case of poverty, for example, empirical evidence suggests that being poor is not only related to a lack of material resources but also to a broader need to deal with problems in a context of chronic scarcity and instability that impose great demands on a person’s time and attention — such as having access to food and shelter. These findings illustrate that poverty is not associated with particular motives, skills, character or behavioural inclinations. Rather, they show that anyone living in a psychological environment of chronic scarcity would begin to display the same biases in planning and problem solving. As a result, behavioural science can help on a wide array of issues intended to reduce poverty, including streamlining administrative procedures to reduce their burden on time, attention and the cognition needed to access social welfare programmes, providing widespread access to financial institutions in order to improve household savings, and reframing and empowering people living in poverty to counteract stereotypes and discrimination.

Insights from the field of behavioural science have also improved health outcomes for the general population. For example, one of the most rapidly expanding tools in healthcare is the use of mobile phones to remind people to attend health appointments and take the medications as prescribed. In particular, such messages are more likely to be effective when there is a follow-up, when communication is personally tailored to the recipient, and when the frequency, wording and content of the message are highly relevant to the patient.

Behavioural science can also inform education policy. There are many lowcost, light-touch interventions that can be directed to promote personal growth, resilience and self-affirmation or to reduce gaps in achievement and dropout rates.

By leveraging the power of behavioural insights, policymakers can help promote key skills to smooth the transition to primary school, promote healthier eating in school lunchrooms through the strategic placement of certain foods, and reduce bullying by leveraging social norms.

This increasing importance of behavioural science has not only been driven by supply— i.e. timely rigorous research and a better understanding of policy constraints by researchers — but also by demand, namely greater awareness and understanding by policymakers and international organisations of the benefits of using behavioural insights for human development.

Around the world, the United Kingdom — through its Behavioural Insights Group inside the Cabinet Office — is probably the most advanced country when it comes to applying this approach in government. But in 2017 the Organisation for Economic Co-operation and Development (OECD) tracked over 130 government units, initiatives, capacities and partnerships established globally in every continent, signalling that behavioural input has gone beyond a phase of disruption in government and civil society. Today the challenge is to incorporate behavioural insights into bureaucracies by working closely with all the relevant stakeholders.

This requires political commitment, flexible institutional setups, resource allocation and cooperation across practitioners. Although advancements in the use of behavioural science have been impressive, there are still many challenges ahead if we are to effectively incorporate it fully into policy formation. Several issues that are up for debate — some that exceed the limits of the scientific community — include the protection of personal information when using big data to design behaviourally informed policies, the design of an ethical framework for policies and interventions, continued dialogue between policymakers to prevent the duplication of efforts and mistakes and the development of standards.

Argentina has a promising path ahead for the incorporation of behavioural insights, set in a context of considerable fiscal deficit and pressing development challenges. Studying human conduct can be an additional tool in the policymaking process and it has become a cost-effective way to change behaviour in ways that can be both subtle and beneficial for wider society.

By Facundo Manes and Martín Maximino. On Twitter: @manesf and @tinchomaximino

(*) PhD in Sciences, Cambridge University. President, INECO Foundation for Research in Cognitive Neuroscience. Dean, Favaloro University.

(**) BA in Political Science, Universidad de San Andrés. MA in Public Policy, Harvard Kennedy School of Government. Director, Office of the Chief-of-Staff to the Governor of the Province of Buenos Aires.