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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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