Piret Tõnurist at the Observatory of Public Sector Innovation: “The draft report “Wo
rking with Change: Systems Approaches to Public Sector Challenges” is now available online. In addition to the framework that was introduced previously on Hackpad, the team working on systems thinking at the Observatory has added four in-depth case studies from Canada, Finland, Iceland and the Netherlands to the analysis. The empirical cases show that systems change in the public sector is possible; moreover, that it can work in diverse settings: child protection in the Netherlands, responding to domestic violence in Iceland, engaging with the sharing economy in Canada, and in experimental policy design in Finland. The final version of the report is expected in June 2017. (Download the draft report here).
The Moment for Participatory Democracy
Hollie Russon Gilman at the Stanford Social Innovation Review: “Since the 2016 US presidential election, everyone—including the President and those protesting outside his office—has been talking about bringing the voices of everyday citizens into public life. Several hurdles have prevented the efforts of many groups—including nationwide organizations, civic technologists, social entrepreneurs, policymakers, and advocates championing civic innovation—from reaching and supporting communities that are already engaging citizens in effective ways. These include but are not limited to:
- The challenge of taking local interventions to national politics
- Overreliance on data-driven mechanisms versus community-based solutions
- A lack of definition of political participation beyond elections
Through many disparate efforts runs a persistent question: Where are these citizens? Where, precisely, are people congregating in public life in 2017 America?
One challenge to engaging community residents in civic life beyond simply voting every two or four years is that there is no consensus about what a more robust, participatory model of democracy—one in which people more actively participate in the civic fabric of their community—looks like in the United States. As Harvard Kennedy School Professor Archon Fung noted in an article:
The lack of any background agreement, or even common orientation, on even basic questions about public participation makes the job of those who champion participatory innovation much more difficult. … There would be much more friction and unevenness in elections in the United States if, every two years, supporters of representative democracy had to convince people in every community across the country why voting is desirable and explain how to conduct elections.
For many scholars and practitioners, the answer to where citizens are congregating is a bit of a riddle: Civic life takes place both everywhere and nowhere specific—it is in cities, towns, and communities all across the country, but there is no single center of gravity. That poses challenges for those who wish to mobilize nationwide efforts and who recognize that citizens have finite time. But beneath these challenges, there is also an opportunity to look with fresh eyes on what is already working, and find ways to build on it and bring it to scale.
Below are three models that have the potential to counter these obstacles and scale across communities. It is important to note, however, that unlike getting a product to market, scale in civic engagement does not always mean working on a national level. Efforts should measure civic engagement “return on investment” not just by the number of people reached, but also by the efficacy, equity, and inclusivity of the activity….(More).
CrowdCurio: an online crowdsourcing platform to facilitate climate change studies using herbarium specimens
Charles G. Willis et al in New Phytologist: “Phenology is a key aspect of plant success. Recent research has demonstrated that herbarium specimens can provide important information on plant phenology. Massive digitization efforts have the potential to greatly expand herbarium-based phenological research, but also pose a serious challenge regarding efficient data collection.
Here, we introduce CrowdCurio, a crowdsourcing tool for the collection of phenological data from herbarium specimens. We test its utility by having workers collect phenological data (number of flower buds, open flowers and fruits) from specimens of two common New England (USA) species: Chelidonium majus and Vaccinium angustifolium. We assess the reliability of using nonexpert workers (i.e. Amazon Mechanical Turk) against expert workers. We also use these data to estimate the phenological sensitivity to temperature for both species across multiple phenophases.
We found no difference in the data quality of nonexperts and experts. Nonexperts, however, were a more efficient way of collecting more data at lower cost. We also found that phenological sensitivity varied across both species and phenophases.
Our study demonstrates the utility of CrowdCurio as a crowdsourcing tool for the collection of phenological data from herbarium specimens. Furthermore, our results highlight the insight gained from collecting large amounts of phenological data to estimate multiple phenophases…(More)”.
Selected Readings on Blockchain Technology and Its Potential for Transforming Governance
By Prianka Srinivasan, Robert Montano, Andrew Young, and Stefaan G. Verhulst
The Living Library’s Selected Readings series seeks to build a knowledge base on innovative approaches for improving the effectiveness and legitimacy of governance. This curated and annotated collection of recommended works on the topic of blockchain and governance was originally published in 2017.
Introduction
In 2008, an unknown source calling itself Satoshi Nakamoto released a paper named Bitcoin: A Peer-to-Peer Electronic Cash System which introduced blockchain technology. Blockchain is a novel system that uses a distributed ledger to record transactions and ensure compliance. Blockchain technology relies on an ability to act as a vast, transparent, and secure public database.
It has since gained recognition as a tool to transform governance by creating a decentralized system to
- manage and protect identity,
- trace and track; and
- incentivize smarter social and business contracts.
These applications cast blockchain as a tool to confront certain public problems in the digital age.
The readings below represent selected readings on the applications for governance. They have been categorized by theme – Governance Applications, Identity Protection and Management, Tracing and Tracking, and Smart Contracts.
Selected Reading List
Governance Applications
- Atzori, Marcella – The Center for Blockchain Technologies (2015) Blockchain Technology and Decentralized Governance: Is the State Still Necessary? – Aims to investigate the political applications of blockchain, particularly in encouraging government decentralization by considering to what extent blockchain can be viewed as “hyper-political tools.” The paper suggests that the domination of private bodies in blockchain systems highlights the continued need for the State to remain as a central point of coordination.
- Boucher, Philip. – European Parliamentary Research Service (2017) How blockchain technology could change our lives – This report commissioned by the European Parliamentary Research Service provides a deep introduction to blockchain theory and its applications to society and political systems, providing 2 page briefings on currencies, digital content, patents, e-voting, smart contracts, supply chains, and blockchain states.
- Boucher, Philip. – Euroscientist (2017) Are Blockchain Applications Guided by Social Values? – This report by a policy analyst at the European Parliament’s Scientific foresight unit, evaluates the social and moral contours of blockchain technology, arguing that “all technologies have value and politics,” and blockchain is no exception. Calls for greater scrutiny on the possibility for blockchain to act as a truly distributed and transparent system without a “middleman.”
- Cheng, Steve; Daub, Matthew; Domeyer, Axel; and Lundqvist, Martin –McKinsey & Company (2017) Using Blockchain to Improve Data Management in the Public Sector–This essay considers the potential uses of blockchain technology for the public sector to improve the security of sensitive information collected by governments and as a way to simplify communication with specialists.
- De Filippi, Primavera; and Wright, Aaron –Paris University & Cordoza School of Law (2015) Decentralized Blockchain Technology and the Rise of Lex Cryptographia – Looks at how to regulate blockchain technology, particularly given its implications on governance and society. Argues that a new legal framework needs to emerge to take into account the applications of self-executing blockchain technology.
- Liebenau, Jonathan and Elaluf-Calderwood, Silvia Monica. – London School of Economics & Florida International University (2016) Blockchain Innovation Beyond Bitcoin and Banking. – A paper that explores the potential of blockchain technology in financial services and in broader digital applications, considers regulatory possibility and frameworks, and highlights the innovative potential of blockchain.
- Prpić, John – Lulea University of Technology (2017) Unpacking Blockchains – This short paper provides a brief introduction to the use of Blockchain outside monetary purposes, breaking down its function as a digital ledger and transaction platform.
- Stark, Josh – Ledger Labs (2016) Making Sense of Blockchain Governance Applications –This CoinDesk article discusses, in simple terms, how blockchain technology can be used to accomplish what is called “the three basic functions of governance.”
- UK Government Chief Scientific Adviser (2016) Distributed Ledger Technology: Beyond Blockchain – A report from the UK Government that investigates the use of blockchain’s “distributed leger” as a database for governments and other institutions to adopt.
Identity Protection and Management
- Baars, D.S. – University of Twente (2016) Towards Self-Sovereign Identity Using Blockchain Technology. – A study exploring self-sovereign identity – i.e. the ability of users to control their own digital identity – that led to the creation of a new architecture designed for users to manage their digital ID. Called the Decentralized Identity Management System, it is built on blockchain technology and is based on the concept of claim-based identity.
- Burger, Eric and Sullivan, Clare Linda. – Georgetown University (2016) E-Residency and Blockchain. – A case study focused on an Estonian commercial initiative that allows for citizens of any nation to become an “Estonian E-Resident.” This paper explores the legal, policy, and technical implications of the program and considers its impact on the way identity information is controlled and authenticated.
- Nathan, Oz; Pentland, Alex ‘Sandy’; and Zyskind, Guy – Security and Privacy Workshops (2015) Decentralizing Privacy: Using Blockchain to Protect Personal Data – Describes the potential of blockchain technology to create a decentralized personal data management system, making third-party personal data collection redundant.
- De Filippi, Primavera – Paris University (2016) The Interplay Between Decentralization and Privacy: The Case of Blockchain Technologies – A journal entry that weighs the radical transparency of blockchain technology against privacy concerns for its users, finding that the apparent dichotomy is not as at conflict with itself as it may first appear.
Tracing and Tracking
- Barnes, Andrew; Brake, Christopher; and Perry, Thomas – Plymouth University (2016) Digital Voting with the use of Blockchain Technology – A report investigating the potential of blockchain technology to overcome issues surrounding digital voting, from voter fraud, data security and defense against cyber attacks. Proposes a blockchain voting system that can safely and robustly manage these challenges for digital voting.
- The Economist (2015), “Blockchains The Great Chain of Being Sure About Things.” – An exploratory article that explores the potential usefulness of a blockchain-based land registry in places like Honduras and Greece, transaction registries for trading stock, and the creation of smart contracts.
- Lin, Wendy; McDonnell, Colin; and Yuan, Ben – Massachusetts Institute of Technology (2015) Blockchains and electronic health records. – Suggests the “durable transaction ledger” fundamental to blockchain has wide applicability in electronic medical record management. Also, evaluates some of the practical shortcomings in implementing the system across the US health industry.
Smart Contracts
- Iansiti, Marco; and Lakhani, Karim R. – Harvard Business Review (2017) The Truth about Blockchain – A Harvard Business Review article exploring how blockchain technology can create secure and transparent digital contracts, and what effect this may have on the economy and businesses.
- Levy, Karen E.C. – Engaging Science, Technology, and Society (2017) Book-Smart, Not Street-Smart: Blockchain-Based Smart Contracts and The Social Workings of Law. – Article exploring the concept of blockchain-based “smart contracts” – contracts that securely automate and execute obligations without a centralized authority – and discusses the tension between law, social norms, and contracts with an eye toward social equality and fairness.
Annotated Selected Reading List
Cheng, Steve, Matthias Daub, Axel Domeyer, and Martin Lundqvist. “Using blockchain to improve data management in the public sector.” McKinsey & Company. Web. 03 Apr. 2017. http://bit.ly/2nWgomw
- An essay arguing that blockchain is useful outside of financial institutions for government agencies, particularly those that store sensitive information such as birth and death dates or information about marital status, business licensing, property transfers, and criminal activity.
- Blockchain technology would maintain the security of such sensitive information while also making it easier for agencies to use and access critical public-sector information.
- Despite its potential, a significant drawback for use by government agencies is the speed with which blockchain has developed – there are no accepted standards for blockchain technologies or the networks that operate them; and because many providers are start-ups, agencies might struggle to find partners that will have lasting power. Additionally, government agencies will have to remain vigilant to ensure the security of data.
- Although best practices will take some time to develop, this piece argues that the time is now for experimentation – and that governments would be wise to include blockchain in their strategies to learn what methods work best and uncover how to best unlock the potential of blockchain.
“The Great Chain of Being Sure About Things.” The Economist. The Economist Newspaper, 31 Oct. 2015. Web. 03 Apr. 2017. http://econ.st/1M3kLnr
- This is an exploratory article written in The Economist that examines the various potential uses of blockchain technology beyond its initial focus on bitcoin:
-
- It highlights the potential of blockchain-based land registries as a way to curb human rights abuses and insecurity in much of the world (it specifically cites examples in Greece and Honduras);
- It also highlights the relative security of blockchain while noting its openness;
- It is useful as a primer for how blockchain functions as tool for a non-specialist;
- Discusses “smart contracts” (about which we have linked more research above);
- Analyzes potential risks;
- And considers the potential future unlocked by blockchain
- This article is particularly useful as a primer into the various capabilities and potential of blockchain for interested researchers who may not have a detailed knowledge of the technology or for those seeking for an introduction.
Iansiti, Marco and Lakhani, Karim R. “The Truth About Blockchain.” Harvard Business Review. N.p., 17 Feb. 2017. Web. 06 Apr. 2017. http://bit.ly/2hqo3FU
- This entry into the Harvard Business Review discusses blockchain’s ability to solve the gap between emerging technological progress and the outdated ways in which bureaucracies handle and record contracts and transactions.
- Blockchain, the authors argue, allows us to imagine a world in which “contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision”, allowing for the removal of intermediaries and facilitating direct interactions between individuals and institutions.
- The authors compare the emergence of blockchain to other technologies that have had transformative power, such as TCP/IP, and consider the speed with which they have proliferated and become mainstream.
- They argue that like TCP/IP, blockchain is likely decades away from maximizing its potential and offer frameworks for the adoption of the technology involving both single-use, localization, substitution, and transformation.
- Using these frameworks and comparisons, the authors present an investment strategy for those interested in blockchain.
IBM Global Business Services Public Sector Team. “Blockchain: The Chain of Trust and its Potential to Transform Healthcare – Our Point of View.” IBM. 2016. http://bit.ly/2oBJDLw
- This enthusiastic business report from IBM suggests that blockchain technology can be adopted by the healthcare industry to “solve” challenges healthcare professionals face. This is primarily achieved by blockchain’s ability to streamline transactions by establishing trust, accountability, and transparency.
- Structured around so-called “pain-points” in the healthcare industry, and how blockchain can confront them, the paper looks at 3 concepts and their application in the healthcare industry:
- Bit-string cryptography: Improves privacy and security concerns in healthcare, by supporting data encryption and enforces complex data permission systems. This allows healthcare professionals to share data without risking the privacy of patients. It also streamlines data management systems, saving money and improving efficiency.
- Transaction Validity: This feature promotes the use of electronic prescriptions by allowing transactional trust and authenticated data exchange. Abuse is reduced, and abusers are more easily identified.
- Smart contracts: This streamlines the procurement and contracting qualms in healthcare by reducing intermediaries. Creates a more efficient and transparent healthcare system.
- The paper goes on to signal the limitations of blockchain in certain use cases (particularly in low-value, high-volume transactions) but highlights 3 use cases where blockchain can help address a business problem in the healthcare industry.
- Important to keep in mind that, since this paper is geared toward business applications of blockchain through the lens of IBM’s investments, the problems are drafted as business/transactional problems, where blockchain primarily improves efficiency than supporting patient outcomes.
Nathan, Oz; Pentland, Alex ‘Sandy’; and Zyskind, Guy “Decentralizing Privacy: Using Blockchain to Protect Personal Data” Security and Privacy Workshops (SPW). 2015. http://bit.ly/2nPo4r6
- This technical paper suggests that anonymization and centralized systems can never provide complete security for personal data, and only blockchain technology, by creating a decentralized data management system, can overcome these privacy issues.
- The authors identify 3 common privacy concerns that blockchain technology can address:
- Data ownership: users want to own and control their personal data, and data management systems must acknowledge this.
- Data transparency and auditability: users want to know what data is been collected and for what purpose.
- Fine-grained access control: users want to be able to easily update and adapt their permission settings to control how and when third-party organizations access their data.
- The authors propose their own system designed for mobile phones which integrates blockchain technology to store data in a reliable way. The entire system uses blockchain to store data, verify users through a digital signature when they want to access data, and creates a user interface that individuals can access to view their personal data.
- Though much of the body of this paper includes technical details on the setup of this blockchain data management system, it provides a strong case for how blockchain technology can be practically implemented to assuage privacy concerns among the public. The authors highlight that by using blockchain “laws and regulations could be programmed into the blockchain itself, so that they are enforced automatically.” They ultimately conclude that using blockchain in such a data protection system such as the one they propose is easier, safer, and more accountable.
Wright, Aaron, and Primavera De Filippi. “Decentralized blockchain technology and the rise of lex cryptographia.” 2015. Available at SSRN . http://bit.ly/2oujvoG
- This paper proposes that the emergence of blockchain technology, and its various applications (decentralized currencies, self-executing contracts, smart property etc.), will necessitate the creation of a new subset of laws, termed by the authors as “Lex Cryptographia.”
- Considering the ability for blockchain to “cut out the middleman” there exist concrete challenges to law enforcement faced by the coming digital revolution brought by the technology. These encompass the very benefits of blockchain; for instance, the authors posit that the decentralized, autonomous nature of blockchain systems can act much like “a biological virus or an uncontrollable force of nature” if the system was ill-intentioned. Though this same system can regulate the problems of corruption and hierarchy associated with traditional, centralized systems, their autonomy poses an obvious obstacle for law-enforcement.
- The paper goes on to details all the possible benefits and societal impacts of various applications of blockchain, finally suggesting there exists a need to “rethink” traditional models of regulating society and individuals. They predict a rise in Lex Cryptographia “characterized by a set of rules administered through self-executing smart contracts and decentralized (and potentially autonomous) organizations.” Much of these regulations depend upon the need to supervise restrictions placed upon blockchain technology that may chill its application, for instance corporations who may choose to purposefully avoid including any blockchain-based applications in their search engines so as to stymie the adoption of this technology.
Five hacks for digital democracy
Beth Simone Noveck in Nature: “…Technology is already changing the way public institutions make decisions. Governments at every level are using ‘big data’ to pinpoint or predict the incidence of crime, heart attack and foodborne illness. Expert networking platforms — online directories of people and their skills, such as NovaGob.org in Spain — are helping to match civil servants who have the relevant expertise with those who need the know-how.
To get beyond conventional democratic models of representation or referendum, and, above all, to improve learning in the civil service, we must build on these pockets of promise and evolve. That requires knowledge of what works and when. But there is a dearth of research on the impact of technology on public institutions. One reason is a lack of suitable research methods. Many academics prefer virtual labs with simulated conditions that are far from realistic. Field experiments have long been used to evaluate the choice between two policies. But much less attention is paid to how public organizations might operate differently with new technologies.
The perfect must not be the enemy of the good. Even when it is impractical to create a control group and run parallel interventions in the same institution, comparisons can yield insights. For instance, one could compare the effect of using citizen commenting on legislative proposals in the Brazilian parliament with similar practices in the Finnish parliament.
Of course, some leaders have little interest in advancing more than their own power. But many more politicians and public servants are keen to use research-based evidence to guide how they use technology to govern in the public interest.
The MacArthur Foundation in Chicago, Illinois, has started funding a research network — a dozen academics and public servants — to study the possibilities of using new technology to govern more transparently and in partnership with citizens (see www.opening-governance.org). More collaboration among universities and across disciplines is needed. New research platforms — such as the Open Governance Research Exchange, developed by the Governance Lab, the UK-based non-profit mySociety and the World Bank — can offer pathways for sharing research findings and co-creating methodologies….(More)”
The 2017 Connected Citizen Report
Salesforce Research: “To understand how Americans today engage with local and federal government agencies, Salesforce released its “2017 Connected Citizen Report.” The survey was conducted online by Harris Poll on behalf of Salesforce, Dec. 9-13, 2016, among 2,057 adults, ages 18 and older, in the United States. The report found that some Americans said their local governments do not provide many general services — such as being able to report a road issue or apply for/submit a business permit — via modern digital channels. In addition, more than half of Americans would be open to their taxpayer money going to research forward-looking technologies for their cities, assuming it is for services they would find helpful. Finally, while most Americans agree they have better experiences communicating with private enterprises than government agencies, many that did engage with the Internal Revenue Service (IRS), Health and Human Services (HHS) or the Veterans Affairs (VA) in the past 12 months reported positive interactions overall….(More)”
Standard Business Reporting: Open Data to Cut Compliance Costs
Report by the Data Foundation: “Imagine if U.S. companies’ compliance costs could be reduced, by billions of dollars. Imagine if this could happen without sacrificing any transparency to investors and governments. Open data can make that possible.
This first-ever research report, co-published by the Data Foundation and PwC, explains how Standard Business Reporting (SBR), in which multiple regulatory agencies adopt a common open data structure for the information they collect, reduces costs for both companies and agencies.
SBR programs are in place in the Netherlands, Australia, and elsewhere – but the concept is unknown in the United States. Our report is intended to introduce SBR to U.S. policymakers and lay the groundwork for future change….(More)”.
Avoiding Data Graveyards: Insights from Data Producers & Users in Three Countries
Report by Samantha Custer and Tanya Sethi: “Government, development partner, and civil society leaders make decisions every day about how to allocate, monitor and evaluate development assistance. Policymakers and practitioners can theoretically draw from more data sources in a variety of formats than ever before to inform these decisions,but will they choose to do so? Those who collect data and produce evidence are often far removed from those who ultimately influence and make decisions. Technocratic ideals of evidence-informed policymaking and data-driven decision-making are easily undercut by individual prerogatives, organizational imperatives, and ecosystem-wide blind spots.
In 2016, researchers from the AidData Center for Development Policy interviewed nearly 200 decision-makers and those that advise them in Honduras, Timor-Leste, and Senegal. Central government officials, development partner representatives based in country, and leaders of civil society organizations (CSOs) shared their experiences in producing and using data to target development projects, monitor progress, and evaluate results.
Specifically, the report answers three questions:
- Who produces development data and statistics, for what purposes and for whom?
- What are the the technical and political constraints for decision-makers to use development data in their work?
- What can funders and producers do differently to encourage use of data and evidence in decision-making?
Using a theory of change, we identify nine barriers to the use of data and corresponding operating principles for funders and producers to make demand-driven investments in the next generation of development data and statistics….(More)”.
Towards an experimental culture in government: reflections on and from practice
Jesper Christiansen et al at Nesta: “…we share some initial reflections from this work with the hope of prompting a useful discussion about how to articulate the value of experimentation as well as what to consider when strategically planning and doing experiments in government contexts.
Reflection 1: Experimentation as a way of accelerating learning and exploring “the room of the non-obvious”
Governments need to increase their pace and agility in learning about which ideas have the highest potential value-creation and make people’s lives the rationale of governing.
Experimental approaches accelerate learning by systematically testing assumptions and identifying knowledge gaps. What is there to be known about the problem and the function, fit and probability of a suggested solution? Experimentation helps fill these gaps without allocating too much time or resource, and helps governments accelerate the exploration of new potential solution spaces.
This approach is often a key contribution of government policy labs and public sector innovation teams. Units like Lab para la Ciudad in Mexico City, Alberta Co-Lab in Canada, Behavioural insights and Design Unit in Singapore, MindLab in Denmark and Policy Lab in the UK are specifically set up to promote, develop and/or embed experimental approaches and accelerate user-centred learning in different levels of government.
In addition, creating a culture of experimentation extends the policy options available by creating a political environment to test non-linear approaches to wicked problems. In our training, we often distinguish between “the room of the obvious” and the “room of the non-obvious”. By designing portfolios of experiments that include – by deliberate design – the testing of at least some non-linear, non-obvious solutions, government officials can move beyond the automatic mode of many policy interventions and explore the “room of the non-obvious” in a safe-to-fail context (think barbers to prevent suicides or dental insurance to prevent deforestation).
Reflection 2: Experimentation as a way of turning uncertainty into risk
In everyday language, uncertainty and risk are two notions that are often used interchangeably; yet they are very different concepts. Take, for example, the implementation of a solution. Risk is articulated in terms of the probability that the solution will generate a certain outcome. It is measurable (e.g. based on existing data there is X per cent chance of success, or X per cent chance of failure) and qualitative risk factors can be developed and described.
Uncertainty, on the other hand, is a situation where there is a lack of probabilities. There is no prior data on how the solution might perform; future outcomes are not known, and can therefore not be measured. The chance of success can be 0 per cent, 100 per cent, or anything in between (see table below).
There is often talk of the need for government to become more of a ‘risk taker’, or to become better at ‘managing risk’. But as Marco Steinberg, founder of strategic design practice Snowcone & Haystack, recently reminded us, risk-management – where probabilities are known – is actually something that governments do quite well. Issues arise when governments’ legacies can’t shape current solutions: when governments have to deal with the uncertainty of complex challenges by adapting or creating entirely new service systems to fit the needs of our time.
For example, when transforming a health system to fit the needs of our time, little can be known about the probabilities in terms of what might work when establishing a new practice. Or when transforming a social care system to accommodate the lives of vulnerable families, entirely new concepts for solutions need to be explored. “If you don’t have a map showing the way, you have to write one yourself,” as Sam Rye puts it in his inspirational example on the use of experimental cards at The Labs Wananga….
Reflection 3: Experimentation as a way to reframe failure and KPIs
Reflection 4: Experimentation on a continuum between exploration and validation
Reflection 5: Experimentation as cultural change…(More)”.
Nudging people to make good choices can backfire
Bruce Bower in ScienceNews: “Nudges are a growth industry. Inspired by a popular line of psychological research and introduced in a best-selling book a decade ago, these inexpensive behavior changers are currently on a roll.
Policy makers throughout the world, guided by behavioral scientists, are devising ways to steer people toward decisions deemed to be in their best interests. These simple interventions don’t force, teach or openly encourage anyone to do anything. Instead, they nudge, exploiting for good — at least from the policy makers’ perspective — mental tendencies that can sometimes lead us astray.
But new research suggests that low-cost nudges aimed at helping the masses have drawbacks. Even simple interventions that work at first can lead to unintended complications, creating headaches for nudgers and nudgees alike…
Promising results of dozens of nudge initiatives appear in two government reports issued last September. One came from the White House, which released the second annual report of its Social and Behavioral Sciences Team. The other came from the United Kingdom’s Behavioural Insights Team. Created by the British government in 2010, the U.K. group is often referred to as the Nudge Unit.
In a September 20, 2016, Bloomberg View column, Sunstein said the new reports show that nudges work, but often increase by only a few percentage points the number of people who, say, receive government benefits or comply with tax laws. He called on choice architects to tackle bigger challenges, such as finding ways to nudge people out of poverty or into higher education.
Missing from Sunstein’s comments and from the government reports, however, was any mention of a growing conviction among some researchers that well-intentioned nudges can have negative as well as positive effects. Accepting automatic enrollment in a company’s savings plan, for example, can later lead to regret among people who change jobs frequently or who realize too late that a default savings rate was set too low for their retirement needs. E-mail reminders to donate to a charity may work at first, but annoy recipients into unsubscribing from the donor list.
“I don’t want to get rid of nudges, but we’ve been a bit too optimistic in applying them to public policy,” says behavioral economist Mette Trier Damgaard of Aarhus University in Denmark.
Nudges, like medications for physical ailments, require careful evaluation of intended and unintended effects before being approved, she says. Policy makers need to know when and with whom an intervention works well enough to justify its side effects.
Default downer
That warning rings especially true for what is considered a shining star in the nudge universe — automatic enrollment of employees in retirement savings plans. The plans, called defaults, take effect unless workers decline to participate….
But little is known about whether automatic enrollees are better or worse off as time passes and their personal situations change, says Harvard behavioral economist Brigitte Madrian. She coauthored the 2001 paper on the power of default savings plans.
Although automatic plans increase savings for those who otherwise would have squirreled away little or nothing, others may lose money because they would have contributed more to a self-directed retirement account, Madrian says. In some cases, having an automatic savings account may encourage irresponsible spending or early withdrawals of retirement money (with penalties) to cover debts. Such possibilities are plausible but have gone unstudied.
In line with Madrian’s concerns, mathematical models developed by finance professor Bruce Carlin of the University of California, Los Angeles and colleagues suggest that people who default into retirement plans learn less about money matters, and share less financial information with family and friends, than those who join plans that require active investment choices.
Opt-out savings programs “have been oversimplified to the public and are being sold as a great way to change behavior without addressing their complexities,” Madrian says. Research needs to address how well these plans mesh with individuals’ personalities and decision-making styles, she recommends….
Researchers need to determine how defaults and other nudges instigate behavior changes before unleashing them on the public, says philosopher of science Till Grüne-Yanoff of the Royal Institute of Technology in Stockholm….
Sometimes well-intentioned, up-front attempts to get people to do what seems right come back to bite nudgers on the bottom line.
Consider e-mail prompts and reminders. ….A case in point is a study submitted for publication by Damgaard and behavioral economist Christina Gravert of the University of Gothenburg in Sweden. E-mailed donation reminders sent to people who had contributed to a Danish anti-poverty charity increased the number of donations in the short term, but also triggered an upturn in the number of people unsubscribing from the list.
People’s annoyance at receiving reminders perceived as too frequent or pushy cost the charity money over the long haul, Damgaard holds. Losses of list subscribers more than offset the financial gains from the temporary uptick in donations, she and Gravert conclude.
“Researchers have tended to overlook the hidden costs of nudging,” Damgaard says….(More)”