By Bibek Debroy & Sajeesh Kumar N
Most public policies world over have relied on basic economic principles. This assumes that people act on their own self-interest. However, the last decade has seen burgeoning interest in application of behavioural science in formulation and implementation of public policy. The aim has been to translate the science of behavioural changes into smarter policy interventions and impactful outcomes.
Recently, Cass Sunstein, who pioneered ‘Nudge Theory’ along with Nobel Prize winning economist, Richard Thaler, was effusive in his praise for India’s efforts into incorporating behavioural insights in public policy. A new paradigm has been in the making in India, to create impactful yet sustainable policy outcomes by applying behavioural tools in missions like ‘Swachh Bharat’.
Swachh Bharat Mission (SBM) has used ‘Prospect Theory’ in Behavioural Economics extensively for driving behavioural change. Prospect Theory predicts that the way choices are framed has a material impact on people’s preferences. It shows that people are loss averse, i.e. people will go greater lengths to avoid a perceived loss than obtaining a perceived benefit, even if the loss and benefit are of equal value. By highlighting the ill effects of poor sanitation and number of deaths it causes through a well-coordinated communication strategy, Swachh Bharat Mission was able to impact behaviours of millions, especially in rural areas.
Similarly, the insights on ‘Present—Biases’ were also effectively used in SBM. People generally are averse to let go of what they have, for a perceived future gain. However, by organising ‘Swachhata Divas’ and ‘Swachhata Pakhwadas’, SBM leveraged the ‘Fresh Start Effect’ to persuade people to overcome present biases in favour of decisions which are good for them in long run. Research in behavioural science affirms that the ‘Fresh Start Effect’ helps in protecting people against present biases.
Another concept that has gained traction is ‘Social Proofing’. Studies conducted across the US and India show that making the actions of people more observable adds social pressure on people towards a preferred behaviour. By making open defecation more ‘observable’ as unaccepted social behaviour, SBM could motivate more and more people to build toilets by applying social pressure. By conducting an annual survey, ‘Swachh Sarvekshan’, SBM could successfully leverage ‘Social Proofing’ concepts to bring in a competitive spirit between local bodies. This has also fostered social accountability within these bodies. The department of drinking water and sanitation conducted Swachh Survekshan Grameen to provide a national ranking of all districts and states on the basis of sanitation parameters. Swachh Sarvekshan – Grameen alone has covered about 17,450 villages across 698 districts in addition to 4,240 cities covered under Swachh Sarvekshan – Urban.
SBM was also unique in the way seven lakh ‘Swachhagrahis’ reached out to villagers to motivate them to build toilets and stop the practice of open defecation. ‘Swachhagrahis’ have used behavioural tools like ‘Plan Making’ and ‘Follow Up’ to achieve the milestones by linking behaviour to a concrete future moment. ‘Swachhagrahis’ have also organised events and disseminated information across communities at regular intervals, making the message of SBM easily recallable. The ‘Ease of Recall’ was achieved by ensuring vividness, recency and repetition.
Behavioural tools like wearing ‘Swachhata Badges’ or participating in ‘Swachhata Pledge’ have also helped in escalating people’s commitment towards a ‘Clean India’. In behavioural science it is called foot-in-the-door technique that aims at getting a person to agree to a large request by having them agree to a moderate request first.
These insights learned from SBM could be valuable while formulating other important government schemes. For example, ‘Framing Tools’ based on Prospect Theory can be used to promote cashless transactions. Prospect Theory suggests that citizens are more likely to pay with a credit card if price differentials are framed as cash discounts rather than surcharges on the credit card.
Similarly, understanding ‘Present Biases’ helps nudge people towards ‘giving up’ subsidies. When there is a trade-off between a ‘want’ and ‘should’ option, people prefer the want option in the present. Hence, instead of nudging people to give up subsidies immediately, extracting a commitment to give up at a future date yields a better result. Moreover, simple steps like letting households know how they performed compared to neighbours in waste segregation, water consumption or electricity usage, based on ‘Social Proofing’ will nudge them towards more segregation and conservation respectively.
There are many behavioural tools available for policy makers. However, the tendency of misconstruing correlations as causations has to be overcome before applying these tools. Correlation between two variables can also occur due to mere coincidence, reverse causation or common cause due to an omitted variable. The obvious point is, all correlations are not causations.
In India, most public policy interventions are directly aimed at improving the quality of life of people. Applying some of the behavioural approaches to public policies, therefore, can enhance the public buy-in and achieve the intended outcomes. However, there is a need to use behaviour insights and science of behavioural changes in a more systemic way. Setting up of a ‘Behaviour Insight Team’ in government of India, to help different ministries incorporate psychological and cognitive dimensions in public policy, may be useful.
(Debroy is Chairman, PMEAC and Kumar is Director, Ministry of Railways. Views are personal)
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Source: Financial Express