Selected Readings on Behavioral Economics: Nudges

Curated on Posted on by Andrew Young

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 behavioral economics was originally published in 2014.

The 2008 publication of Richard Thaler and Cass Sunstein’s Nudge ushered in a new era of behavioral economics, and since then, policy makers in the United States and elsewhere have been applying behavioral economics to the field of public policy. Like Smart Disclosure, behavioral economics can be used in the public sector to improve the decisionmaking ability of citizens without relying on regulatory interventions. In the six years since Nudge was published, the United Kingdom has created the Behavioural Insights Team (also known as the Nudge Unit), a cross-ministerial organization that uses behavioral economics to inform public policy, and the White House has recently followed suit by convening a team of behavioral economists to create a behavioral insights-driven team in the United States. Policymakers have been using behavioral insights to design more effective interventions in the fields of long term unemployment; roadway safety; enrollment in retirement plans; and increasing enrollment in organ donation registries, to name some noteworthy examples. The literature of this nascent field provides a look at the growing optimism in the potential of applying behavioral insights in the public sector to improve people’s lives.

Selected Reading List (in alphabetical order)

  • John Beshears, James Choi, David Laibson and Brigitte C. Madrian – The Importance of Default Options for Retirement Savings Outcomes: Evidence from the United States – a paper examining the role default options play in encouraging intelligent retirement savings decisionmaking.
  • Cabinet Office and Behavioural Insights Team, United Kingdom – Applying Behavioural Insights to Health – a paper outlining some examples of behavioral economics being applied to the healthcare landscape using cost-efficient interventions.
  • Matthew Darling, Saugato Datta and Sendhil Mullainathan – The Nature of the BEast: What Behavioral Economics Is Not – a paper discussing why control and behavioral economics are not as closely aligned as some think, reiterating the fact that the field is politically agnostic.
  • Antoinette Schoar and Saugato Datta – The Power of Heuristics – a paper exploring the concept of “heuristics,” or rules of thumb, which can provide helpful guidelines for pushing people toward making “reasonably good” decisions without a full understanding of the complexity of a situation.
  • Richard H. Thaler and Cass R. Sunstein – Nudge: Improving Decisions About Health, Wealth, and Happiness – an influential book describing the many ways in which the principles of behavioral economics can be and have been used to influence choices and behavior through the development of new “choice architectures.” 
  • U.K. Parliament Science and Technology Committee – Behaviour Change – an exploration of the government’s attempts to influence the behaviour of its citizens through nudges, with a focus on comparing the effectiveness of nudges to that of regulatory interventions.

Annotated Selected Reading List (in alphabetical order)

Beshears, John, James Choi, David Laibson and Brigitte C. Madrian. “The Importance of Default Options for Retirement Savings Outcomes: Evidence from the United States.” In Jeffrey R. Brown, Jeffrey B. Liebman and David A. Wise, editors, Social Security Policy in a Changing Environment, Cambridge: National Bureau of Economic Research, 2009. http://bit.ly/LFmC5s.

  • This paper examines the role default options play in pushing people toward making intelligent decisions regarding long-term savings and retirement planning.
  • Importantly, the authors provide evidence that a strategically oriented default setting from the outset is likely not enough to fully nudge people toward the best possible decisions in retirement savings. They find that the default settings in every major dimension of the savings process (from deciding whether to participate in a 401(k) to how to withdraw money at retirement) have real and distinct effects on behavior.

Cabinet Office and Behavioural Insights Team, United Kingdom. “Applying Behavioural Insights to Health.” December 2010. http://bit.ly/1eFP16J.

  • In this report, the United Kingdom’s Behavioural Insights Team does not attempt to “suggest that behaviour change techniques are the silver bullet that can solve every problem.” Rather, they explore a variety of examples where local authorities, charities, government and the private-sector are using behavioural interventions to encourage healthier behaviors.  
  • The report features case studies regarding behavioral insights ability to affect the following public health issues:
    • Smoking
    • Organ donation
    • Teenage pregnancy
    • Alcohol
    • Diet and weight
    • Diabetes
    • Food hygiene
    • Physical activity
    • Social care
  • The report concludes with a call for more experimentation and knowledge gathering to determine when, where and how behavioural interventions can be most effective in helping the public become healthier.

Darling, Matthew, Saugato Datta and Sendhil Mullainathan. “The Nature of the BEast: What Behavioral Economics Is Not.” The Center for Global Development. October 2013. https://bit.ly/2QytRmf.

  • In this paper, Darling, Datta and Mullainathan outline the three most pervasive myths that abound within the literature about behavioral economics:
    • First, they dispel the relationship between control and behavioral economics.  Although tools used within behavioral economics can convince people to make certain choices, the goal is to nudge people to make the choices they want to make. For example, studies find that when retirement savings plans change the default to opt-in rather than opt-out, more workers set up 401K plans. This is an example of a nudge that guides people to make a choice that they already intend to make.
    • Second, they reiterate that the field is politically agnostic. Both liberals and conservatives have adopted behavioral economics and its approach is neither liberal nor conservative. President Obama embraces behavioral economics but the United Kingdom’s conservative party does, too.
    • And thirdly, the article highlights that irrationality actually has little to do with behavioral economics. Context is an important consideration when one considers what behavior is rational and what behavior is not. Rather than use the term “irrational” to describe human beings, the authors assert that humans are “infinitely complex” and behavior that is often considered irrational is entirely situational.

Schoar, Antoinette and Saugato Datta. “The Power of Heuristics.” Ideas42. January 2014. https://bit.ly/2UDC5YK.

  • This paper explores the notion that being presented with a bevy of options can be desirable in many situations, but when making an intelligent decision requires a high-level understanding of the nuances of vastly different financial aid packages, for example, options can overwhelm. Heuristics (rules of thumb) provide helpful guidelines that “enable people to make ‘reasonably good’ decisions without needing to understand all the complex nuances of the situation.”
  • The underlying goal heuristics in the policy space involves giving people the type of “rules of thumb” that enable make good decisionmaking regarding complex topics such as finance, healthcare and education. The authors point to the benefit of asking individuals to remember smaller pieces of knowledge by referencing a series of studies conducted by psychologists Beatty and Kahneman that showed people were better able to remember long strings of numbers when they were broken into smaller segments.
  • Schoar and Datta recommend these four rules when implementing heuristics:
    • Use heuristics where possible, particularly in complex situation;
    • Leverage new technology (such as text messages and Internet-based tools) to implement heuristics.
    • Determine where heuristics can be used in adult training programs and replace in-depth training programs with heuristics where possible; and
    • Consider how to apply heuristics in situations where the exception is the rule. The authors point to the example of savings and credit card debt. In most instances, saving a portion of one’s income is a good rule of thumb. However, when one has high credit card debt, paying off debt could be preferable to building one’s savings.

Thaler, Richard H. and Cass R. Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness. Yale University Press, 2008. https://bit.ly/2kNXroe.

  • This book, likely the single piece of scholarship most responsible for bringing the concept of nudges into the public consciousness, explores how a strategic “choice architecture” can help people make the best decisions.
  • Thaler and Sunstein, while advocating for the wider and more targeted use of nudges to help improve people’s lives without resorting to overly paternal regulation, look to five common nudges for lessons and inspiration:
    • The design of menus gets you to eat (and spend) more;
    • “Flies” in urinals improve, well, aim;
    • Credit card minimum payments affect repayment schedules;
    • Automatic savings programs increase savings rate; and
    • “Defaults” can improve rates of organ donation.
  • In the simplest terms, the authors propose the wider deployment of choice architectures that follow “the golden rule of libertarian paternalism: offer nudges that are most likely to help and least likely to inflict harm.”

U.K. Parliament Science and Technology Committee. “Behaviour Change.” July 2011. http://bit.ly/1cbYv5j.

  • This report from the U.K.’s Science and Technology Committee explores the government’s attempts to influence the behavior of its citizens through nudges, with a focus on comparing the effectiveness of nudges to that of regulatory interventions.
  • The author’s central conclusion is that, “non-regulatory measures used in isolation, including ‘nudges,’ are less likely to be effective. Effective policies often use a range of interventions.”
  • The report’s other major findings and recommendations are:
    • Government must invest in gathering more evidence about what measures work to influence population behaviour change;
    • They should appoint an independent Chief Social Scientist to provide them with robust and independent scientific advice;
    • The Government should take steps to implement a traffic light system of nutritional labelling on all food packaging; and
    • Current voluntary agreements with businesses in relation to public health have major failings. They are not a proportionate response to the scale of the problem of obesity and do not reflect the evidence about what will work to reduce obesity. If effective agreements cannot be reached, or if they show minimal benefit, the Government should pursue regulation.”

It’s the Neoliberalism, Stupid: Why instrumentalist arguments for Open Access, Open Data, and Open Science are not enough.

Curated on Posted on by Stefaan Verhulst

Eric Kansa at LSE Blog: “…However, I’m increasingly convinced that advocating for openness in research (or government) isn’t nearly enough. There’s been too much of an instrumentalist justification for open data an open access. Many advocates talk about how it will cut costs and speed up research and innovation. They also argue that it will make research more “reproducible” and transparent so interpretations can be better vetted by the wider community. Advocates for openness, particularly in open government, also talk about the wonderful commercial opportunities that will come from freeing research…
These are all very big policy issues, but they need to be asked if the Open Movement really stands for reform and not just a further expansion and entrenchment of Neoliberalism. I’m using the term “Neoliberalism” because it resonates as a convenient label for describing how and why so many things seem to suck in Academia. Exploding student debt, vanishing job security, increasing compensation for top administrators, expanding bureaucracy and committee work, corporate management methodologies (Taylorism), and intensified competition for ever-shrinking public funding all fall under the general rubric of Neoliberalism. Neoliberal universities primarily serve the needs of commerce. They need to churn out technically skilled human resources (made desperate for any work by high loads of debt) and easily monetized technical advancements….
“Big Data,” “Data Science,” and “Open Data” are now hot topics at universities. Investments are flowing into dedicated centers and programs to establish institutional leadership in all things related to data. I welcome the new Data Science effort at UC Berkeley to explore how to make research data professionalism fit into the academic reward systems. That sounds great! But will these new data professionals have any real autonomy in shaping how they conduct their research and build their careers? Or will they simply be part of an expanding class of harried and contingent employees- hired and fired through the whims of creative destruction fueled by the latest corporate-academic hype-cycle?
Researchers, including #AltAcs and “data professionals”, need  a large measure of freedom. Miriam Posner’s discussion about the career and autonomy limits of Alt-academic-hood help highlight these issues. Unfortunately, there’s only one area where innovation and failure seem survivable, and that’s the world of the start-up. I’ve noticed how the “Entrepreneurial Spirit” gets celebrated lots in this space. I’m guilty of basking in it myself (10 years as a quasi-independent #altAc in a nonprofit I co-founded!).
But in the current Neoliberal setting, being an entrepreneur requires a singular focus on monetizing innovation. PeerJ and Figshare are nice, since they have business models that less “evil” than Elsevier’s. But we need to stop fooling ourselves that the only institutions and programs that we can and should sustain are the ones that can turn a profit. For every PeerJ or Figshare (and these are ultimately just as dependent on continued public financing of research as any grant-driven project), we also need more innovative organizations like the Internet Archive, wholly dedicated to the public good and not the relentless pressure to commoditize everything (especially their patrons’ privacy). We need to be much more critical about the kinds of programs, organizations, and financing strategies we (as a society) can support. I raised the political economy of sustainability issue at a recent ThatCamp and hope to see more discussion.
In reality so much of the Academy’s dysfunctions are driven by our new Gilded Age’s artificial scarcity of money. With wealth concentrated in so few hands, it is very hard to finance risk taking and entreprenurialism in the scholarly community, especially to finance any form of entrepreneurialism that does not turn a profit in a year or two.
Open Access and Open Data will make so much more of a difference if we had the same kind of dynamism in the academic and nonprofit sector as we have in the for-profit start-up sector. After all, Open Access and Open Data can be key enablers to allow much broader participation in research and education. However, broader participation still needs to be financed: you cannot eat an open access publication. We cannot gloss over this key issue.
We need more diverse institutional forms so that researchers can find (or found) the kinds of organizations that best channel their passions into contributions that enrich us all. We need more diverse sources of financing (new foundations, better financed Kickstarters) to connect innovative ideas with the capital needed to see them implemented. Such institutional reforms will make life in the research community much more livable, creative, and dynamic. It would give researchers more options for diverse and varied career trajectories (for-profit or not-for-profit) suited to their interests and contributions.
Making the case to reinvest in the public good will require a long, hard slog. It will be much harder than the campaign for Open Access and Open Data because it will mean contesting Neoliberal ideologies and constituencies that are deeply entrenched in our institutions. However, the constituencies harmed by Neoliberalism, particularly the student community now burdened by over $1 trillion in debt and the middle class more generally, are much larger and very much aware that something is badly amiss. As we celebrate the impressive strides made by the Open Movement in the past year, it’s time we broaden our goals to tackle the needs for wider reform in the financing and organization of research and education.
This post originally appeared on Digging Digitally and is reposted under a CC-BY license.”

The Age of ‘Infopolitics’

Curated on Posted on by Stefaan Verhulst

Colin Koopman in the New York Times: “We are in the midst of a flood of alarming revelations about information sweeps conducted by government agencies and private corporations concerning the activities and habits of ordinary Americans. After the initial alarm that accompanies every leak and news report, many of us retreat to the status quo, quieting ourselves with the thought that these new surveillance strategies are not all that sinister, especially if, as we like to say, we have nothing to hide.
One reason for our complacency is that we lack the intellectual framework to grasp the new kinds of political injustices characteristic of today’s information society. Everyone understands what is wrong with a government’s depriving its citizens of freedom of assembly or liberty of conscience. Everyone (or most everyone) understands the injustice of government-sanctioned racial profiling or policies that produce economic inequality along color lines. But though nearly all of us have a vague sense that something is wrong with the new regimes of data surveillance, it is difficult for us to specify exactly what is happening and why it raises serious concern, let alone what we might do about it.
Our confusion is a sign that we need a new way of thinking about our informational milieu. What we need is a concept of infopolitics that would help us understand the increasingly dense ties between politics and information. Infopolitics encompasses not only traditional state surveillance and data surveillance, but also “data analytics” (the techniques that enable marketers at companies like Target to detect, for instance, if you are pregnant), digital rights movements (promoted by organizations like the Electronic Frontier Foundation), online-only crypto-currencies (like Bitcoin or Litecoin), algorithmic finance (like automated micro-trading) and digital property disputes (from peer-to-peer file sharing to property claims in the virtual world of Second Life). These are only the tip of an enormous iceberg that is drifting we know not where.
Surveying this iceberg is crucial because atop it sits a new kind of person: the informational person. Politically and culturally, we are increasingly defined through an array of information architectures: highly designed environments of data, like our social media profiles, into which we often have to squeeze ourselves. The same is true of identity documents like your passport and individualizing dossiers like your college transcripts. Such architectures capture, code, sort, fasten and analyze a dizzying number of details about us. Our minds are represented by psychological evaluations, education records, credit scores. Our bodies are characterized via medical dossiers, fitness and nutrition tracking regimens, airport security apparatuses. We have become what the privacy theorist Daniel Solove calls “digital persons.” As such we are subject to infopolitics (or what the philosopher Grégoire Chamayou calls “datapower,” the political theorist Davide Panagia “datapolitik” and the pioneering thinker Donna Haraway “informatics of domination”).
Today’s informational person is the culmination of developments stretching back to the late 19th century. It was in those decades that a number of early technologies of informational identity were first assembled. Fingerprinting was implemented in colonial India, then imported to Britain, then exported worldwide. Anthropometry — the measurement of persons to produce identifying records — was developed in France in order to identify recidivists. The registration of births, which has since become profoundly important for initiating identification claims, became standardized in many countries, with Massachusetts pioneering the way in the United States before a census initiative in 1900 led to national standardization. In the same era, bureaucrats visiting rural districts complained that they could not identify individuals whose names changed from context to context, which led to initiatives to universalize standard names. Once fingerprints, biometrics, birth certificates and standardized names were operational, it became possible to implement an international passport system, a social security number and all other manner of paperwork that tells us who someone is. When all that paper ultimately went digital, the reams of data about us became radically more assessable and subject to manipulation, which has made us even more informational.
We like to think of ourselves as somehow apart from all this information. We are real — the information is merely about us. But what is it that is real? What would be left of you if someone took away all your numbers, cards, accounts, dossiers and other informational prostheses? Information is not just about you — it also constitutes who you are….”

Innovation in the Government Industry

Curated on Posted on by Stefaan Verhulst

in Huffington Post: “Government may be susceptible to the same forces that are currently changing many major industries. Software is eating government, too. Therefore government must use customer development to better serve customers else it risks becoming the next Blockbuster, Borders, or what the large publishing and financial services companies are at risk of becoming…
Government is currently one size fits all. In a free market, there is unblunding and multiple offerings for different segments of a market. For example there’s Natural Light, Budweiser, and Guinness. Competition forces companies to serve customers because if customers don’t like one offering they will simply choose a different one. If you don’t like your laundromat, restaurant, or job, you can simply go somewhere else. In contrast, switching governments is really hard.
Why Now
Government has been able to go a very long time without significant innovation. However now is the time for government to begin adapting because the forces changing nearly every industry may do the same to government. I will reiterate a few themes that Fred Wilson cited in a talk at LeWeb while talking about several different industries and add some more thoughts.
1. Organization: Technology driven networks replacing bureaucratic hierarchies
Bureaucratic hierarchies involve chains of command with lower levels of management making more detailed decisions and reporting back to higher levels of management. These systems often entail long communication lags, high costs, and principal/agent problems.
Technology driven networks are providing more efficient systems for organization and communication. For example, Amazon has changed the publishing industry by enabling anyone to publish content and enabling customers to decide what they want. Twitter has created a network around communication and news, enabling anyone who people want to hear to be heard.
2. Competition: Unbundling of product and service offerings
Technology advancements have made it cheaper and easier than ever before to produce a product and bring it to market. One result is that it’s become easier for an entrepreneur to provide one offering of a larger offering as a standalone offering. It provides customers with the option to buy what they want without having to pay more for stuff they don’t want. In addition, the offerings can be improved because producers are completely focused on that specific offering. For example, we used to buy one newspaper and get world, local, sports, etc. Now it’s all from different sources.
Bundling exists because it was more efficient than attempting to contract in the market for every tiny service. However some of the technology driven networks (as described above) are helping markets become more efficient and giving customers more customizable buying options. For example, you can buy a half hour of education, or borrow money from a peer.
We’re starting to see some of the governments offerings begin to be unbundled. For example, Uber and Hyperloop are providing transportation. A neighborhood in Oakland crowdfunded private security.
3. Finance: Lower payment transaction fees and crowdfunding
Innovation in payments, including Bitcoin, has made it cheaper and easier than ever to transfer money. It’s as easy as sending an email, clicking a hyperlink, or scanning a QR code. In addition, Bitcoin is not controlled by any regulators or intermediaries like the government, credit card companies, or even PayPal.
Crowdfunding enables the collective efforts of individuals to connect and pool their money to back initiatives, make purchases, or fund new projects. A school in Houston crowdfunded some exercise equipment instead of using government funding.
4. Communication: We are all connected and graphed
Mobile devices have become nearly as powerful as desktops or laptops. There are many things we can do with our phone that we can’t do on our desktop/laptop. For example, smartphones have sensors, are location aware, can be carried with us at all times, and are cheaper than desktops or laptops. These factors have lead to mass adoption of mobile devices across the world, including in countries with high poverty where people could not previously afford a desktop or laptop. Mobile is making innovative offerings like Uber and mobile payments possible.
Platforms like Facebook and Twitter provide everyone with access to millions of people. In addition, companies like Klout and Quora are measuring our reputation and social graph improving our ability to transact with each other. For example, when market participants trust one another (through the vehicle of a reputation system) many transactions that wouldn’t otherwise happen can now happen.This illustrated in the rise in popularity of collaborative consumption platforms and peer to peer marketplaces.
Serving Customers
The current government duopoly inhibits us from selecting the government that we want as well as from receiving the best possible service because of lack of incentive. However the technologies described above are making it possible to get services previously provided by the government through more efficient and effective means. They’re enabling a more free market for government services….
If government were to take the customer development route, it could try things like unbundling (see above) so that people could opt for the specific solutions they desire. Given the US government’s current balance sheet, it may actually need to start relying on other providers.
It could also rely more on “economic feedback” to inform its actions. Currently economic feedback is given through voting. Most people vote once every two or four years and then hope they get what they “paid” for. Can you imagine paying for a college without knowing which one you would be going to, know what they would be providing, or being able to request a refund or switch colleges? With more economic incentive, services would need to improve. For example, if there was a free market for roads, people would pay for and use the roads that were most safe.”

Selected Readings on Big Data

Curated on Posted on by Andrew Young

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 big data was originally published in 2014.

Big Data refers to the wide-scale collection, aggregation, storage, analysis and use of data. Government is increasingly in control of a massive amount of raw data that, when analyzed and put to use, can lead to new insights on everything from public opinion to environmental concerns. The burgeoning literature on Big Data argues that it generates value by: creating transparency; enabling experimentation to discover needs, expose variability, and improve performance; segmenting populations to customize actions; replacing/supporting human decision making with automated algorithms; and innovating new business models, products and services. The insights drawn from data analysis can also be visualized in a manner that passes along relevant information, even to those without the tech savvy to understand the data on its own terms (see The GovLab Selected Readings on Data Visualization).

Selected Reading List (in alphabetical order)

Annotated Selected Reading List (in alphabetical order)

Australian Government Information Management Office. The Australian Public Service Big Data Strategy: Improved Understanding through Enhanced Data-analytics Capability Strategy Report. August 2013. http://bit.ly/17hs2xY.

  • This Big Data Strategy produced for Australian Government senior executives with responsibility for delivering services and developing policy is aimed at ingraining in government officials that the key to increasing the value of big data held by government is the effective use of analytics. Essentially, “the value of big data lies in [our] ability to extract insights and make better decisions.”
  • This positions big data as a national asset that can be used to “streamline service delivery, create opportunities for innovation, identify new service and policy approaches as well as supporting the effective delivery of existing programs across a broad range of government operations.”

Bollier, David. The Promise and Peril of Big Data. The Aspen Institute, Communications and Society Program, 2010. http://bit.ly/1a3hBIA.

  • This report captures insights from the 2009 Roundtable exploring uses of Big Data within a number of important consumer behavior and policy implication contexts.
  • The report concludes that, “Big Data presents many exciting opportunities to improve modern society. There are incalculable opportunities to make scientific research more productive, and to accelerate discovery and innovation. People can use new tools to help improve their health and well-being, and medical care can be made more efficient and effective. Government, too, has a great stake in using large databases to improve the delivery of government services and to monitor for threats to national security.
  • However, “Big Data also presents many formidable challenges to government and citizens precisely because data technologies are becoming so pervasive, intrusive and difficult to understand. How shall society protect itself against those who would misuse or abuse large databases? What new regulatory systems, private-law innovations or social practices will be capable of controlling anti-social behaviors–and how should we even define what is socially and legally acceptable when the practices enabled by Big Data are so novel and often arcane?”

Boyd, Danah and Kate Crawford. “Six Provocations for Big Data.” A Decade in Internet Time: Symposium on the Dynamics of the Internet and Society. September 2011. http://bit.ly/1jJstmz.

  • In this paper, Boyd and Crawford raise challenges to unchecked assumptions and biases regarding big data. The paper makes a number of assertions about the “computational culture” of big data and pushes back against those who consider big data to be a panacea.
  • The authors’ provocations for big data are:
    • Automating Research Changes the Definition of Knowledge
    • Claims to Objectivity and Accuracy are Misleading
    • Big Data is not always Better Data
    • Not all Data is Equivalent
    • Just Because it is accessible doesn’t make it ethical
    • Limited Access to Big Data creates New Digital Divide

The Economist Intelligence Unit. Big Data and the Democratisation of Decisions. October 2012. http://bit.ly/17MpH8L.

  • This report from the Economist Intelligence Unit focuses on the positive impact of big data adoption in the private sector, but its insights can also be applied to the use of big data in governance.
  • The report argues that innovation can be spurred by democratizing access to data, allowing a diversity of stakeholders to “tap data, draw lessons and make business decisions,” which in turn helps companies and institutions respond to new trends and intelligence at varying levels of decision-making power.

Manyika, James, Michael Chui, Brad Brown, Jacques Bughin, Richard Dobbs, Charles Roxburgh, and Angela Hung Byers. Big Data: The Next Frontier for Innovation, Competition, and Productivity.  McKinsey & Company. May 2011. http://bit.ly/18Q5CSl.

  • This report argues that big data “will become a key basis of competition, underpinning new waves of productivity growth, innovation, and consumer surplus, and that “leaders in every sector will have to grapple with the implications of big data.” 
  • The report offers five broad ways in which using big data can create value:
    • First, big data can unlock significant value by making information transparent and usable at much higher frequency.
    • Second, as organizations create and store more transactional data in digital form, they can collect more accurate and detailed performance information on everything from product inventories to sick days, and therefore expose variability and boost performance.
    • Third, big data allows ever-narrower segmentation of customers and therefore much more precisely tailored products or services.
    • Fourth, big sophisticated analytics can substantially improve decision-making.
    • Finally, big data can be used to improve the development of the next generation of products and services.

The Partnership for Public Service and the IBM Center for The Business of Government. “From Data to Decisions II: Building an Analytics Culture.” October 17, 2012. https://bit.ly/2EbBTMg.

  • This report discusses strategies for better leveraging data analysis to aid decision-making. The authors argue that, “Organizations that are successful at launching or expanding analytics program…systematically examine their processes and activities to ensure that everything they do clearly connects to what they set out to achieve, and they use that examination to pinpoint weaknesses or areas for improvement.”
  • While the report features many strategies for government decisions-makers, the central recommendation is that, “leaders incorporate analytics as a way of doing business, making data-driven decisions transparent and a fundamental approach to day-to-day management. When an analytics culture is built openly, and the lessons are applied routinely and shared widely, an agency can embed valuable management practices in its DNA, to the mutual benet of the agency and the public it serves.”

TechAmerica Foundation’s Federal Big Data Commission. “Demystifying Big Data: A Practical Guide to Transforming the Business of Government.” 2013. http://bit.ly/1aalUrs.

  • This report presents key big data imperatives that government agencies must address, the challenges and the opportunities posed by the growing volume of data and the value Big Data can provide. The discussion touches on the value of big data to businesses and organizational mission, presents case study examples of big data applications, technical underpinnings and public policy applications.
  • The authors argue that new digital information, “effectively captured, managed and analyzed, has the power to change every industry including cyber security, healthcare, transportation, education, and the sciences.” To ensure that this opportunity is realized, the report proposes a detailed big data strategy framework with the following steps: define, assess, plan, execute and review.

World Economic Forum. “Big Data, Big Impact: New Possibilities for International Development.” 2012. http://bit.ly/17hrTKW.

  • This report examines the potential for channeling the “flood of data created every day by the interactions of billions of people using computers, GPS devices, cell phones, and medical devices” into “actionable information that can be used to identify needs, provide services, and predict and prevent crises for the benefit of low-income populations”
  • The report argues that, “To realise the mutual benefits of creating an environment for sharing mobile-generated data, all ecosystem actors must commit to active and open participation. Governments can take the lead in setting policy and legal frameworks that protect individuals and require contractors to make their data public. Development organisations can continue supporting governments and demonstrating both the public good and the business value that data philanthropy can deliver. And the private sector can move faster to create mechanisms for the sharing data that can benefit the public.”

How Government Can Make Open Data Work

Curated on Posted on by Stefaan Verhulst

Joel Gurin in Information Week: “At the GovLab at New York University, where I am senior adviser, we’re taking a different approach than McKinsey’s to understand the evolving value of government open data: We’re studying open data companies from the ground up. I’m now leading the GovLab’s Open Data 500 project, funded by the John S. and James L. Knight Foundation, to identify and examine 500 American companies that use government open data as a key business resource.
Our preliminary results show that government open data is fueling companies both large and small, across the country, and in many sectors of the economy, including health, finance, education, energy, and more. But it’s not always easy to use this resource. Companies that use government open data tell us it is often incomplete, inaccurate, or trapped in hard-to-use systems and formats.
It will take a thorough and extended effort to make government data truly useful. Based on what we are hearing and the research I did for my book, here are some of the most important steps the federal government can take, starting now, to make it easier for companies to add economic value to the government’s data.
1. Improve data quality
The Open Data Policy not only directs federal agencies to release more open data; it also requires them to release information about data quality. Agencies will have to begin improving the quality of their data simply to avoid public embarrassment. We can hope and expect that they will do some data cleanup themselves, demand better data from the businesses they regulate, or use creative solutions like turning to crowdsourcing for help, as USAID did to improve geospatial data on its grantees.
 
 

2. Keep improving open data resources
The government has steadily made Data.gov, the central repository of federal open data, more accessible and useful, including a significant relaunch last week. To the agency’s credit, the GSA, which administers Data.gov, plans to keep working to make this key website still better. As part of implementing the Open Data Policy, the administration has also set up Project Open Data on GitHub, the world’s largest community for open-source software. These resources will be helpful for anyone working with open data either inside or outside of government. They need to be maintained and continually improved.
3. Pass DATA
The Digital Accountability and Transparency Act would bring transparency to federal government spending at an unprecedented level of detail. The Act has strong bipartisan support. It passed the House with only one dissenting vote and was unanimously approved by a Senate committee, but still needs full Senate approval and the President’s signature to become law. DATA is also supported by technology companies who see it as a source of new open data they can use in their businesses. Congress should move forward and pass DATA as the logical next step in the work that the Obama administration’s Open Data Policy has begun.
4. Reform the Freedom of Information Act
Since it was passed in 1966, the federal Freedom of Information Act has gone through two major revisions, both of which strengthened citizens’ ability to access many kinds of government data. It’s time for another step forward. Current legislative proposals would establish a centralized web portal for all federal FOIA requests, strengthen the FOIA ombudsman’s office, and require agencies to post more high-interest information online before they receive formal requests for it. These changes could make more information from FOIA requests available as open data.
5. Engage stakeholders in a genuine way
Up to now, the government’s release of open data has largely been a one-way affair: Agencies publish datasets that they hope will be useful without consulting the organizations and companies that want to use it. Other countries, including the UK, France, and Mexico, are building in feedback loops from data users to government data providers, and the US should, too. The Open Data Policy calls for agencies to establish points of contact for public feedback. At the GovLab, we hope that the Open Data 500 will help move that process forward. Our research will provide a basis for new, productive dialogue between government agencies and the businesses that rely on them.
6. Keep using federal challenges to encourage innovation
The federal Challenge.gov website applies the best principles of crowdsourcing and collective intelligence. Agencies should use this approach extensively, and should pose challenges using the government’s open data resources to solve business, social, or scientific problems. Other approaches to citizen engagement, including federally sponsored hackathons and the White House Champions of Change program, can play a similar role.
Through the Open Data Policy and other initiatives, the Obama administration has set the right goals. Now it’s time to implement and move toward what US CTO Todd Park calls “data liberation.” Thousands of companies, organizations, and individuals will benefit.”

New Open Data Tool Helps Countries Compare Progress on Education

Curated on Posted on by Stefaan Verhulst

World Bank Group: “The World Bank Group today launched a new open data tool that provides in-depth, comparative, and easily accessible data on education policies around the world. The Systems Approach for Better Education Results (SABER) web tool helps countries collect and analyze information on their education policies, benchmark themselves against other countries, and prioritize areas for reform, with the goal of ensuring that all children and youth go to school and learn….
To date, the Bank Group, through SABER, has analyzed more than 100 countries to guide more effective reforms and investments in education at all levels, from pre-primary to tertiary education and workforce development.
Through SABER, the Bank Group aims to improve education quality by supplying policymakers, civil society, school administrators, teachers, parents, and students with more, and more meaningful, data about key education policy areas, including early childhood development, student assessment, teachers, school autonomy and accountability, and workforce development, among others.
SABER helps countries improve their education systems in three ways:

  1. Providing new data on policies and institutions. SABER collects comparable country data on education policies and institutions that are publicly available at: http://worldbank.org/education/saber, allowing governments, researchers, and other stakeholders to measure and monitor progress.
  2. Benchmarking education policies and institutions. Each policy area is rated on a four-point scale, from “Latent” to “Emerging” to “Established” and “Advanced.” These ratings highlight a country’s areas of strength and weakness while promoting cross-country learning.
  3. Highlighting key policy choices. SABER data collection and analysis produce an objective snapshot of how well a country’s education system is performing in relation to global good practice. This helps highlight the most important policy choices to spur learning.”

Brazil let its citizens make decisions about city budgets. Here’s what happened.

Curated on Posted on by Stefaan Verhulst

Brian Wampler and Mike Touchton in the Washington Post: “Over the past 20 years, “participatory institutions” have spread around the world. Participatory institutions delegate decision-making authority directly to citizens, often in local politics, and have attracted widespread support.  International organizations, such as the World Bank and USAID, promote citizen participation in hopes that it will generate more accountable governments, strengthen social networks, improve public services, and inform voters. Elected officials often support citizen participation because it provides them the legitimacy necessary to alter spending patterns, develop new programs, mobilize citizens, or open murky policymaking processes to greater public scrutiny. Civil society organizations and citizens support participating institution because they get unprecedented access to policymaking venues, public budgets and government officials.
But do participatory institutions actually achieve any of these beneficial outcomes?  In a new study of participatory institutions in Brazil, we find that they do.  In particular, we find that municipalities with participatory programs improve the lives of their citizens.
Brazil is a leading innovator in participatory institutions. Brazilian municipal governments can voluntarily adopt a program known as Participatory Budgeting. This program directly incorporates citizens into public meetings where citizens decide how to allocate public funds. The funding amounts can represent up to 100 percent of all new capital spending projects and generally fall between 5 and 15 percent of the total municipal budget.  This is not enough to radically change how cities spend limited resources, but it is enough to generate meaningful change. For example, the Brazilian cities of Belo Horizonte and Porto Alegre have each spent hundreds of millions of U.S. dollars over the past two decades on projects that citizens selected. Moreover, many Participatory Budgeting programs have an outsize impact because they focus resources on areas that have lower incomes and fewer public services.
Between 1990 and 2008, over 120 of Brazil’s largest 250 cities adopted Participatory Budgeting. In order to assess whether PB had an impact, we compared the number of cities that adopted Participatory Budgeting during each mayoral period to cities that did not adopt it, and accounted for a range of other factors that might distinguish these two groups of cities.
The results are promising. Municipal governments that adopted Participatory Budgeting spent more on education and sanitation and saw infant mortality decrease as well. We estimate cities without PB to have infant mortality levels similar to Brazil’s mean. However, infant mortality drops by almost 20 percent for municipalities that have used PB for more than eight years — again, after accounting for other political and economic factors that might also influence infant mortality.  The evidence strongly suggests that the investment in these programs is paying important dividends. We are not alone in this conclusion: Sónia Gonçalves has reached similar conclusions about Participatory Budgeting in Brazil….
Our results also show that Participatory Budgeting’s influence strengthens over time, which indicates that its benefits do not merely result from governments making easy policy changes. Instead, Participatory Budgeting’s increasing impact indicates that governments, citizens, and civil society organizations are building new institutions that produce better forms of governance. These cities incorporate citizens at multiple moments of the policy process, allowing community leaders and public officials to exchange better information. The cities are also retraining policy experts and civil servants to better work with poor communities. Finally, public deliberation about spending priorities makes these city governments more transparent, which decreases corruption…”

Citizen roles in civic problem-solving and innovation

Curated on Posted on by Stefaan Verhulst

Satish Nambisan: “Can citizens be fruitfully engaged in solving civic problems? Recent initiatives in cities such as Boston (Citizens Connect), Chicago (Smart Chicago Collaborative), San Francisco (ImproveSF) and New York (NYC BigApps) indicate that citizens can be involved in not just identifying and reporting civic problems but in conceptualizing, designing and developing, and implementing solutions as well.
The availability of new technologies (e.g. social media) has radically lowered the cost of collaboration and the “distance” between government agencies and the citizens they serve. Further involving citizens — who are often closest to and possess unique knowledge about the problems they face — makes a lot of sense given the increasing complexity of the problems that need to be addressed.
A recent research report that I wrote highlights four distinct roles that citizens can play in civic innovation and problem-solving.
As explorer, citizens can identify and report emerging and existing civic problems. For example, Boston’s Citizen Connect initiative enables citizens to use specially built smartphone apps to report minor and major civic problems (from potholes and graffiti to water/air pollution). Closer to home, both Wisconsin and Minnesota have engaged thousands of citizen volunteers in collecting data on the quality of water in their neighborhood streams, lakes and rivers (the data thus gathered are analyzed by the state pollution control agency). Citizens also can be engaged in data analysis. The N.Y.-based Datakind initiative involves citizen volunteers using their data analysis skills to mine public data in health, education, environment, etc., to identify important civic issues and problems.
As “ideator,”citizens can conceptualize novel solutions to well-defined problems in public services. For example, the federal government’s Challenge.gov initiative employs online contests and competitions to solicit innovative ideas from citizens to solve important civic problems. Such “crowdsourcing” initiatives also have been launched at the county, city and state levels (e.g. Prize2theFuture competition in Birmingham, Ala.; ImproveSF in San Francisco).
As designer, citizens can design and/or develop implementable solutions to well-defined civic problems. For example, as part of initiatives such as NYC Big Apps and Apps for California, citizens have designed mobile apps to address specific issues such as public parking availability, public transport delays, etc. Similarly, the City Repair project in Portland, Ore., focuses on engaging citizens in co-designing and creatively transforming public places into sustainable community-oriented urban spaces.
As diffuser,citizens can play the role of a change agent and directly support the widespread adoption of civic innovations and solutions. For example, in recent years, physicians interacting with peer physicians in dedicated online communities have assisted federal and state government agencies in diffusing health technology innovations such as electronic medical record systems (EMRs).
In the private sector, companies across industries have benefited much from engaging with their customers in innovation. Evidence so far suggests that the benefits from citizen engagement in civic problem-solving are equally tangible, valuable and varied. However, the challenges associated with organizing such citizen co-creation initiatives are also many and imply the need for government agencies to adopt an intentional, well-thought-out approach….”

The Eight Key Issues of Digital Government

Curated on Posted on by Stefaan Verhulst

Andrea Di Maio (Gartner): “…Now, to set the record straight, I do believe digital government is profoundly different from e-government as well as from government 2.0 (although in some jurisdictions the latter terms still looks more relevant than “digital”). Whereas there are many differences as far as technologies and what they make possible,political will, and evolving citizen demand, my contention is that the single most fundamental difference is in the relevance of data and how new and unforeseen uses of data can truly transform the way governments deliver their services and perform their operations.
This is not at all just about government as a platform or open government, where government is primarily a provider of data that constituents – be they citizens, business or intermediaries – use and mash up in new ways. It is also about government themselves inventing new ways to user their own as well as constituents’ data. It is only by striking the right balance between being a data provider and being a data broker and consumer that governments will find the right path to being truly digital.
During the Gartner Symposia I attended last fall, I had numerous interesting conversations with people who are exploring very innovative ways of using its own data, such as:

  • tax authorities contemplating to use up-to-date financial information about taxpayers to proactively suggest investments that may provide tax breaks,
  • education institutions leveraging data about student location from their original purpose (giving parents information about students’ whereabouts) to providing new tools for teachers to understand behavioral patterns and relate those to more personalized learning
  • immigration authorities leveraging data coming from video analysis, whose role is to flag suspicious immigrants for secondary inspection, to inform public safety authorities or the hospitality sector about specific issues and opportunities with tourists.

In the second half of 2013, Gartner government analysts focused on distilling the fundamental components of a digital government initiative, in order to be able to shape our research and advice in ways that hit the most important issues that client face. The new government research agenda has just been published (see Agenda Overview for Government, 2014) and eight key issues, grouped in three distinct areas,  that need to be addressed to successfully transform into a digital government organization.
Engaging Citizens

  • Service Delivery Innovation: How will governments use technology to support innovative services that produce better results for society?
  • Open Government: How will governments create and sustain a digital ecosystem that citizens can trust and want to participate in?

Connecting Agencies

  • New Digital Business Models: What data-driven business models will emerge to meet the growing needs for adequate and sustainable public services?
  • Joint Governance: How will governance coordinate IT and service decisions across independent public and private organizations?
  • Scalable Interoperability: How much interoperability is needed to support connected government services and at what cost?

Resourcing Government

  • Workforce Innovation: How will the IT organization and role transform to support government workforce innovation?
  • Adaptive Sourcing: How will government IT organizations expand their sourcing strategies to take advantage of competitive cloud-based and consumer-grade solutions?
  • Sustainable Financing: How will government IT organizations obtain and manage the financial resources required to connect government and engage citizens?”