Beyond nudging: it’s time for a second generation of behaviourally-informed social policy

Katherine Curchin at LSE Blog: “…behavioural scientists are calling for a second generation of behaviourally-informed policy. In some policy areas, nudges simply aren’t enough. Behavioural research shows stronger action is required to attack the underlying cause of problems. For example, many scholars have argued that behavioural insights provide a rationale for regulation to protect consumers from manipulation by private sector companies. But what might a second generation of behaviourally-informed social policy look like?

Behavioural insights could provide a justification to change the trajectory of income support policy. Since the 1990s policy attention has focused on the moral character of benefits recipients. Inspired by Lawrence Mead’s paternalist philosophy, governments have tried to increase the resolve of the unemployed to work their way out of poverty. More and more behavioural requirements have been attached to benefits to motivate people to fulfil their obligations to society.

But behavioural research now suggests that these harsh policies are misguided. Behavioural science supports the idea that people often make poor decisions and do things which are not in their long term interests.  But the weakness of individuals’ moral constitution isn’t so much the problem as the unequal distribution of opportunities in society. There are circumstances in which humans are unlikely to flourish no matter how motivated they are.

Normal human psychological limitations – our limited cognitive capacity, limited attention and limited self-control – interact with environment to produce the behaviour that advocates of harsh welfare regimes attribute to permissive welfare. In their book Scarcity, Sendhil Mullainathan and Eldar Shafir argue that the experience of deprivation creates a mindset that makes it harder to process information, pay attention, make good decisions, plan for the future, and resist temptations.

Importantly, behavioural scientists have demonstrated that this mindset can be temporarily created in the laboratory by placing subjects in artificial situations which induce the feeling of not having enough. As a consequence, experimental subjects from middle-class backgrounds suddenly display the short-term thinking and irrational decision making often attributed to a culture of poverty.

Tying inadequate income support to a list of behavioural conditions will most punish those who are suffering most. Empirical studies of welfare conditionality have found that benefit claimants often do not comprehend the complicated rules that apply to them. Some are being punished for lack of understanding rather than deliberate non-compliance.

Behavioural insights can be used to mount a case for a more generous, less punitive approach to income support. The starting point is to acknowledge that some of Mead’s psychological assumptions have turned out to be wrong. The nature of the cognitive machinery humans share imposes limits on how self-disciplined and conscientious we can reasonably expect people living in adverse circumstances to be. We have placed too much emphasis on personal responsibility in recent decades. Why should people internalize the consequences of their behaviour when this behaviour is to a large extent the product of their environment?…(More)”