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Human-Centred Public Policies: The Case for Behavioural Economics

August 31, 2016

The following thoughts/opinions are my own and don’t reflect those of the Government of Ontario.

Hey there.

Where were we? Oh, right, I was savaging behavioural economics as a method of solving complex problems. I did promise you to present the opposite case, and that’s exactly what I will do now. Why is behavioural economics in government a good thing?

I was in an Intro to Service Design session this week and the presenter gave a vivid analogy for designing without thinking about the end user in mind. He said it was like making a Jaguar sports car for a farmer. Jaguars can’t ship pigs to market. No matter how shiny, fast or powerful the Jaguar is, it’s not going to help the farmer.

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Ha! It turns out that Jaguar makes tractors. Or at least KillerCroc88’s youtube channel has a picture of a simulated Jaguar tractor…

When governments design programs to help people or rules for them to follow, I think this analogy applies. Why? Because the people who decided to give the sports car to the farmer were probably thinking about their own needs and preferences. They were using themselves as a proxy for a very different group of people. In government and in other places, people who design programs, policies and procedures tend to be people who are very rational, detail-oriented and logical. They’re probably not representative of the populations they design for. As well, we have a tendency to imagine that we will behave more rationally than we actually do, especially if we are thinking about an action in the future (“Oh yeah, I will start planning that bike trip next month, of course I will”).

What do you get when you put optimistic, rational, detail-oriented people and have them make stuff for others? Pretty much, you get programs and rules that don’t work as well for people as they could. Because we’re not seeing people for who they really are, and not understanding what their lives are really like, we’re often not solving the right problems at all. We tend to solve problems in ways that make it easiest for our bureaucracies to work. We are kind to our systems rather than to our citizens. There’s some give and take here, to be sure, because we have finite resources and time to meet everyone’s needs, but there is much to be done on this front.

What I love about the behavioural economics field is that it does take a kind view of people. It focuses on how people actually behave, and does so with very little judgment. It emphasizes that being human means we have amazing strengths and some flaws as well. As people, we have limited attention spans, we’re easily influenced unknowingly, and our preferences don’t remain consistent. Yet, that doesn’t mean that people don’t have goals and dreams that they keep trying to achieve, and it also doesn’t mean that people aren’t capable of being rational. Behavioural economics tells us not to give up on people, and not to see their failure to take action on their intentions as necessarily being a sign of their laziness or incompetence. It takes a very kind view of people, and tries to find ways to work within their natural human limitations, or even ways to make their natural human limitations work in favour of our goals. By seeing people as they are, we can help them become who they dream of being.

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Replace ‘corporations’ with ‘governments’ and it still applies. Credit: Allison Press, a designer caught

Seeing people for who they really are means letting their actions (and the data they produce) speak for themselves. What’s very satisfying about behavioural economics in government right now is that it is super-objective. We set up and run randomized controlled trials (RCTs), the gold standard for research in the social sciences. If we set up our groups and run the trials right, we can say with a lot of confidence that the small tweaks we make to the decision-making environment are really working. We don’t have to get snarled up in the politics or theory of why people might want to make a choice. We don’t have to pretend to know what will work (often we don’t), and we can get on with testing and improving our solutions until they actually work.

In a way, behavioural economics has a systems perspective built into it. Experiments have shown that human behaviour can vary very widely depending on the context (place, time, people) of a decision. If a doctor tells you to stop smoking, you might try to, but if an acquaintance says the same thing, you’d probably dismiss it. Behavioural interventions usually try to change that context (the Path, from the Elephant and Rider analogy), so they are usually about changing the system. Right now, the system-level changes that can be proposed are very small (e.g. tweaks to forms), but I think that is because of the newness of this way of thinking and the lack of deep research and experimentation capacity in government.

In the future, I can see behaviourally-informed redesigns of our welfare systems or post-secondary application processes becoming more common, and perhaps even informed by small RCTs of different parts of the system. The work of ideas42, a behavioural economics consultancy group, points in this direction. Their reports on poverty in general, and financial products for low and middle-income people demonstrate the crisp new perspective that a behavioural underpinning can bring to big questions like “How can we help people out of poverty?”.

In short, behavioural economics encourages us to see people as they are, to not assume that we know what will work, to test things at a small scale, and to never think that the fact that people (or systems of government) have inbuilt limitations means that they cannot achieve extraordinary things. After all, how is it that we, as extraordinarily flawed beings, have built a society that produced the computer I am typing on, the Internet I am posting to, and the grocery store I will soon shop at? Great things are possible when we start from where we are and keep building.

I’ve glossed over what it really means to make huge changes in government/other sprawling systems, mostly because I think that could be an entire PhD. However, I commit to taking some kind of rambling stab at it  next week. How could it really be possible to develop a new system given that we can’t suspend any essential services? How can you redesign the healthcare system without threatening the care of a whole bunch of people? How do we change when change is hard?

 

 

 

 

 

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Local Maxima vs. Global Maxima: The Case Against Nudging

August 23, 2016

Look at this. Can you guess where I’m going?

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Image Credit: Andrew Parker of the Gong Show

I’ve been thinking about this image pretty often in the month and a half that I’ve been officially working in the behavioural economics field. Sometimes, it worries me.

Why? Because for the past couple years, my main interest has been in complex systems, and how they might be shifted into entirely different (and much better) ways of working. I went to San Francisco because I was interested in how Minerva Schools was drawing a radically different future for higher education. I went to India to learn from the incomparable Pradeep Ghosh about how social problems might be solved with a specific kind of innovative thinking. As I wrote then:

I am interested in how communities can be changed for the better. How does that happen? How do you address problems that part of “the system” itself? And by system I mean all the people and groups in a community and the ways that they interact. The system is partly created by the rules we lay out for ourselves as communities and societies (formal laws = rules, informal = values), partly by some things we can’t always control or change (geographic factors like how far away houses are, or biological factors like aging) and partly created by how we interact with these rules and with each other. It sounds messy, right? Let me take another pass: when we talk about a “community”, it’s tempting to want to picture only the people. That’s a community, right? If you want to fix a problem, you can just help individual people – give them a leg up or something like that.

I think that if you only look at people, and if you look at them all separately, you end up trying to plug holes in a leaky tub but never turning off the water.

Someone explained it to me like this: There are two people, and a river, and there are bodies floating in the river. One person immediately starts fishing bodies out, and another walks away. “Where are you going? How can you leave me when there are so many bodies to be pulled out?” says the first one. “I need to go figure out why they are there in the first place,” the other calls back as she keeps walking.

And we need both kinds of people (we need all kinds of people!), but I strongly identify with the second kind of person, the one who pulls back and tries to see the entire landscape, rather than helping people one by one.

The interesting thing for my personal integrity is that behavioural economics, at least the Version 0.1 that is being implemented in the public sector right now, is arguably more about saving the individual people in the river than it is figuring out why they are falling in in the first place.

For example, let’s look at tax collection. Studies around the world (but especially in the UK) have shown that when you send a letter to people with overdue payments telling them that the majority of their fellow citizens pay their taxes on time, and that they are in the “small minority that requires extra collection efforts”,  these delinquent payers actually get on the bandwagon and fork over more cash than they would have without that letter. That’s great, but it’s not going to affect the wealthy businesspeople who squirrel away as much of their earned income as they can so that it can’t be clawed back. How many ‘average’ people nudged into paying a little more will it take to equal the hidden millions of a few top families?

Nudging (a more colloquial term for behavioural economics) is be easier to do than reforming our tax laws, and that’s probably why the rewards are lower. Successful nudges result in bumps in the single to low double digits. Maybe 86% of people pay on time, and with a nudge, we can get that to 88%. Because nudges are so cheap, even these small bumps can result in huge returns-on-investment. They work quickly, and in a fast-paced political climate it is easy to love things that give results quickly.

I’ll throw up this picture again, because I think I’m finally ready to talk about it.

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Image Credit: Andrew Parker of the Gong Show

When we tweak an existing letter, or train a social worker to ask slightly different questions to their clients, we are searching for a local maximum. We are trying to leave the core of the system or process intact, and instead trying to make peripheral changes that will make it run just a little bit better than it did before. If we are midway up a hill, we will keep walking until we get to the top. We won’t even consider the fact that there are other hills, because to get off of our current hill, we would have to descend – face failure, disrupt people’s lives, and generally cause chaos. Who wants that? There isn’t even a guarantee that there is something better out there!

But, if there is a better way out there, if there is a taller hill that we need to climb, if we refuse to move off of our hill, we will never find it. That’s why behavioural economics Version 0.1 is unsettling to me. We focus on making incremental improvements to existing systems, even though we know that more fundamental changes might be required.

I know I’ve been a bit uncharitable to behavioural economics in this post, though I am trying to make very clear that it is the Version 0.1 implementation that I am seeing in governments across the world to which I am reacting, not the field in general. I think there is a case to be made for behavioural economics, but that can wait for next week’s post.

Until then, keep climbing, my friends 🙂

The Elephant and the Rider

August 16, 2016
Note: The views expressed in this post are my own and do not represent those of the Government of Ontario. 

Hello again!

I am slowly getting back into the swing of blogging. Last time I posted, I was still in San Francisco, a city I miss dearly. I am now back in Toronto, feeling more at home than I have in years. I am lucky enough to be working in the service of the people of Ontario, in the provincial government’s behavioural economics unit.

What exactly is behavioural economics? It’s a necessary addition to traditional economics, a discipline that tends to assume people are perfect rationalists. That is, people are able to effortlessly analyze any situation to make decisions that maximize their self interest. They know exactly how much they want to pay for a house, and they always eat their vegetables because they understand the long-term health benefits. In real life, people aren’t like that, I’m sure you can agree. People who study Behavioural economics observes others in real life (and run some experiments in labs) to find out how they actually make choices. Their research has confirmed that, yup, people are really not perfect rationalists at all.

So what are people like? My favourite way to describe what’s really going on inside our minds comes from psychologist Jonathan Haidt (and was finessed/extended by Chip and Dan Heath in their book Switch: How to Change When Change is Hard). I’ll hit you with a sweet visual to get the point across:

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Taken from Stanford Business School lecture on using neuroscience to influence behaviour.

The Heaths say it well:

“Perched atop the Elephant, the Rider holds the reins and seems to be the leader.  But the Rider’s control is precarious because the Rider is so small relative to the Elephant.  Anytime the six-ton Elephant and the Rider disagree about which direction to go, the Rider is going to lose.  He’s completely overmatched.”

So what do you do with a willful Elephant and a weak Rider? You need to shape the path so that the Elephant starts to walk exactly where the Rider wants to go. How? That’s exactly what I’m learning about at my new job! Follow along if you want to hear about it too… 🙂

Minerva Finale: From Here to Eternity

April 23, 2015

I know I have missed the last two weeks! Sorry! Both of my weekends have been traveling ones. I represented Minerva at the US College Expo in Toronto, and the last 14 days or so have been a blur of final assignments, practicing speeches, giving out informational cards, reconnecting with family, and flying on airplanes.

This will likely be the last post of my Minerva year one experience. As I say goodbye to San Francisco (for now!), I wanted to thank the people who have cared enough to follow my journey, and to share some of theirs with me. I am deeply grateful for the opportunity Minerva gave me to experience and shape the future of higher education, and for the supporters I was lucky enough to have in my corner. Every adventure I had, and every picture I posted, would never have been possible without the collective energy and effort of a village-sized group of people – the Minerva staff, students, and my own small army of loved ones.

I may not write another post for a while – it depends on whether I feel that I have adventures worth sharing – but I wanted to leave you with this photo. I took it at the Market Street prototyping festival. There is a face drawn in chalk at the middle righthand side of the photo, and to me, that face is San Francisco personified: colourful, focused, challenging and open to all that might be possible.

As I step boldly into my next year and a half, I want to keep this face in the back of my mind. I want to live gratefully and also dwell in possibility.

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Nothing but the best to you all!

Take care,

b

Minerva Week 26: Layer by layer (?)

April 6, 2015

How does change happen? Big change, I mean. How does the old interact with the new? Do we have to build on what exists already? What if the foundation isn’t strong?

Image Credit: Make Use Of

This week, I spent seven hours 3-D printing and I honestly have very little show for it (I didn’t take a picture of all the half-printed stuff I produced, but the picture above gives you a sense of what it looked like). Most of that time was spent trying to figure out why the first layer of my print wasn’t sticking, or why the molten plastic was drying too fast. Needless to say, the mindless troubleshooting gave me time to think about the symbolic meaning of 3D printing. It’s a pretty good metaphor for incremental advances. Each layer is added on top of the one before. That means that what happens at the bottom constrains what can happen at the top. You can’t start with a penny-sized circle and then try to add a cup-sized circle on top – there will be nothing for it to hold onto.

When you have a great first layer, though, it becomes so much easier to build something (as you can see from the tiger face I was printing in the picture below!). All you need to do is just keep going, adding a little bit at a time.

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At Minerva, we’re trying to build our own first layer. So much effort has gone into constructing it, making it strong, level and stable. It’s hard work. It would be easier to just add a little change to the existing foundation (of higher education), but it would be impossible. The kinds of things that need to change about education aren’t supported by the current model. I was thinking about this as I finished off the hand-drawn timeline I made for Minerva. You can see it below. So much has happened and so much lies ahead.

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I was thinking about this question again on Saturday, when Minerva’s Student Experience director invited us to a beautiful rooftop to discuss how we can strengthen our first layer. What can we do as students and staff to make sure that students have an even better experience outside the classroom than we did? As we talked about things like residence hall design, meal plans, and location-based assignments, I was reminded of the many challenges that the staff have overcome to get us here. I saw the hurdles that need to be jumped to get us ready in time for the inaugural class. Difficult, but meaningful work has to happen, and all of us need to play a part.

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Today, I headed to the Asian Art Museum, in search of soul food and inspiration. I tried to be more aware of my surroundings, because I realized that I only have a few weeks left to enjoy them. I was struck by how much I had overlooked on past walks. I saw murals that I had never noticed before.

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The Asian Art Museum was a gem. Beautifully designed exhibits showcased exquisite artifacts from Korea, Japan, China, India, Indonesia, and the Philippines, to name a few. The picture below is of contemporary Japanese pottery.

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The ‘layer-by-layer’ motif reared its head at the museum too! The art piece below called “TEA-ter totter”. The explanatory note from the artist said that there is an invisible force holding up the cups (metal rods inside the structure). These invisible rods are meant to represent the intention of the universe, a force that is much stronger than human intention. I could feel the artist speaking to me, almost directly, saying that you have to take the risks, make the effort of doing these hard tasks, because you will be able to manage them. People have managed them in the past, and by the same token you will be able to manage them.

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A state from Indonesia encouraged me to be calm and powerful.

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A 3000-year-old rhinoceros reminded me that sometimes things can be built to last.

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A beautiful mirrored wall by an Iranian artist showed me that reflecting can be a creative activity (that was a pun! 🙂 ).

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I took a look at the city that has shaped me so much in the past eight months, feeling so grateful to be someone who has opportunities to learn, grow, and reflect.

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Minerva Week 25: Prison, City Hall, and Japan

March 30, 2015

This week, I helped host a trip to a prison-turned-park to make kites inside an exhibit designed by a Chinese artist forbidden to leave his country. We went to Alcatraz to visit Ai WeiWei’s @Large exhibit. My task was helping my fellow students create kites that represented freedom to them.

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I worked on my kite with Thy, whose vision of freedom was beautiful. “It is something that can never be touched or taken away by others. If you are free, if you decide you are free, then you can be in jail and still be free. It is something inside you.” We decided to draw a circle of hands around a burning sun, a ball of light always visible but never within reach.

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In an ironic twist, when we tried to fly the kites on Alcatraz we were given a severe reprimand, because we might have been disturbing the habitats of protected sea birds. The whole saga (almost being ticketed, having to quickly dissemble the kites) reminded me that exercising my own freedom can block other freedoms. Not everything is allowed, and often for these reasons. I felt so guilty. Talking with another student, though, I realized that I was responding more to authority that was forcefully exercised(i.e. the Park guard yelling at us) than anything else. We weren’t flying the kites for more than a few minutes, and I doubt we startled any birds. Freedom is fragile.

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That evening, we had a special 10:01 meal. A documentary film crew had been following us the whole day, and we treated them to a showcase of “the best hits” of 10:01s past. Beaver tails did not make the list, but empanadas, hummus, suya (spicy Nigerian chicken), Vietnamese pancakes, and knafeh (Middle Eastern sweet cheese fried dessert – WOW) did. I helped prepare and enjoy food from four continents.

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The next day, we headed to city hall. We were meeting with people from the city planning department, the housing and homelessness department, and the Mayor’s Office for Civic Innovation (MOCI), an office whose work I had read about admiringly. To put it plainly, I learned from and was inspired by, four passionate municipal employees. They were generous with their time and candid with their reflections on the opportunities and challenges that come with working for change within government. One story that illustrated the ‘promise’ of innovative and effective government is the parklets. San Francisco was the first city to work out rules around converting public parking spaces into public social spaces (like in the picture below). One of the people we talked to was actually the person who wrote all of the detailed and involved rules and procedures that need to be followed for a city to collaborate with a community/business to get one of these things going. Now, these rules and procedures have been adopted by cities on four continents.

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This weekend, for my self-mandated exploration time, I walked through the city until I reached Japan (or a reasonable facsimile of it!). I saw people dressed in fancy frilly dresses (meant to look like characters from manga (Japanese comics), I think). You can see a few in the picture below.

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I bought an almost-too-adorable-to-eat “happy face crepe,” filled with green tea ice cream and decorated to look like a woodland creature. I felt no guilt when I ate its head. Maybe it was my hunter-gatherer instincts rearing up. I thought about how simple it was to arrange the chocolate chips, marshmallows and cereal bits on the ice cream to make a face, and how disproportionately happy it made me to see that little cute animal made of ice cream.

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As I was walking, I stopped in parks and on benches to read. I devoured novels about cancer (The Fault in Our Stars) and North Korea (The Orphan Master’s Son). I spent my last night as a 22-year old (or am spending it as I type this!), thinking about what it means to be a free, healthy, loved person in this world. I think that part of the puzzle is paying attention, noticing the universe, finding beauty and meaning in the things around me, but there is much more to be figured out. May this next year of mine bring me further along the path to a meaningful life.

I’ll leave you with a poem by Mary Oliver, called “The Summer Day.”

Who made the world?
Who made the swan, and the black bear?
Who made the grasshopper?
This grasshopper, I mean-
the one who has flung herself out of the grass,
the one who is eating sugar out of my hand,
who is moving her jaws back and forth instead of up and down-
who is gazing around with her enormous and complicated eyes.
Now she lifts her pale forearms and thoroughly washes her face.
Now she snaps her wings open, and floats away.
I don’t know exactly what a prayer is.
I do know how to pay attention, how to fall down
into the grass, how to kneel down in the grass,
how to be idle and blessed, how to stroll through the fields,
which is what I have been doing all day.
Tell me, what else should I have done?
Doesn’t everything die at last, and too soon?
Tell me, what is it you plan to do
with your one wild and precious life?

Minerva Week 24: Yosemite

March 25, 2015

I was lucky enough to spend four nights in Yosemite National Park, courtesy of a trip planned by MORE, Minerva’s Outdoor Recreation and Exploration student group. Yosemite is a magnificent, expansive place. Each day brought new experiences. I climbed up rock steps that had been blown into being by dynamite. I saw deer, and bluejays, but thankfully no bears. I lay in my tent as a powerful thunderstorm raged all around me, feeling full of awe. I had wonderful companions who endured my backwoods humour and my four-days-of-no-showering backwoods odour! I did not open a computer for five days. It was invigorating and restful, and it is a bit of a shock to be back in the city. This week will be full, to say the least, so expect a proper update on Sunday. Until then, enjoy these photographs of the crisp, sunny days I spent in Yosemite!

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Credit for the first two photos goes to Rana Abu Diab, one of the other fearless campers! The rest are mine.