Using behavioral insights to make the most of emergency social protection cash transfers


Article by Laura Rawlings, Jessica Jean-Francois and Catherine MacLeod: “In response to the COVID-19 pandemic, countries across the globe have been adapting social assistance policies to support their populations. In fact, since March 2020, 139 countries and territories have planned, implemented, or adapted cash transfers to support their citizens. Cash transfers specifically make up about half of the social protection programs implemented to address the pandemic. Now more than ever, it’s crucial that such programs are designed to maximize impacts. Behavioral insights can be mobilized as a cost-effective way to help beneficiaries make the most out of the available support. The World Bank and ideas42 partnership on behavioral designs for cash transfer programs is helping countries achieve this goal.

Cash transfers are a key response instrument in the social protection toolkit—and for good reason. Cash transfers have been shown to generate a wide variety of positive benefits, from helping families invest in their children to promoting gender equality. However, we know from our previous work that in order to make the most out of cash transfers, recipients of any program (already facing challenging circumstances that compete for their attention) must undertake complex decisions and actions with their cash. These challenges are only magnified by the global pandemic. COVID-19 has wrought increased uncertainty around future employment and income, which makes calculations and planning to use cash transfer benefits all the more complex.

To help practitioners design programs that account for the complex thought processes and potential barriers recipients face, we mapped out their journey to effectively spend emergency social protection cash transfers. We also created simple, actionable guidance for program designers to put to use in maximizing their programs to help recipients use their cash transfer benefit to most effectively support families and reduce mid- to long-term financial volatility. 

For example, the first step is helping recipients understand what the transfer is for. For recipients who have not yet been impacted by financial instability, or indeed have never encountered a cash transfer before, such funds might seem like a gift or bonus, and recipients may spend it accordingly. Providing clear, simple framing or labelling the transfer may signal to recipients that they should use the cash not only for immediate needs, but also in ways that can help them protect investments in their family members’ human capital and jumpstart their livelihood after the crisis wanes….(More)”.

The Road Back to College Is Paved with Barriers, but Behavioral Science Can Help Smooth the Way


Blog by Katherine Flaschen and Ben Castleman: “In order to create the most effective solutions, policymakers and educators need to better understand a fundamental question: Why do so many of these students, many of whom have already made substantial progress toward their degree, fail to return to college and graduate? …

With a better understanding of the barriers preventing people who intend to finish their degree from following through, policymakers and colleges can create solutions that meaningfully meet students’ needs and help them re-enroll. As states across the country face rising unemployment rates, it’s critical to design and test interventions that address these behavioral barriers and help thousands of citizens who are out of work due to the COVID-19 crisis consider their options for going back to school.

For example, colleges could provide monetary incentives to students for taking actions related to re-enrollment that overcome these barriers, such as speaking with an advisor, reviewing upcoming recommended courses and developing a course plan, and making an active choice about when to return to college. In addition, SCND students could be paired with current students to serve as peer mentors, both to provide support with the re-enrollment process and to hold them accountable for degree completion (especially if faced with difficult remaining classes). Community colleges could also encourage major employers of the SCND population in high-demand fields, like health care, to provide options for employees to finish their degree while working (e.g., via tuition reimbursement programs), translate degree attainment into concrete career returns, and identify representatives within the company, such as recent graduates, to promote re-enrollment and make it a more salient opportunity….(More)”.

Designing Nudges for Success in Health Care


Joseph D. Harrison at AMA Journal of Ethics: “Nudges are subtle changes to the design of the environment or the framing of information that can influence our behaviors. There is significant potential to use nudges in health care to improve patient outcomes and transform health care delivery. However, these interventions must be tested and implemented using a systematic approach. In this article, we describe several ways to design nudges for success by focusing on optimizing and fitting them into the clinical workflow, engaging the right stakeholders, and rapid experimentation….(More)”.

Behavioral Contagion Could Spread the Benefits of a Carbon Tax


Robert H. Frank at the New York Times: “…Why, then, hasn’t the United States adopted a carbon tax? One hurdle is the fear that emissions would fall too slowly in response to a carbon tax, that more direct measures are needed. Another difficulty is that political leaders have reason to fear voter opposition to taxation of any kind. But there are persuasive rejoinders to both objections.

Regarding the first, critics are correct that a carbon tax alone won’t parry the climate threat. It is also true that as creatures of habit, humans tend to change their behavior only slowly, even in the face of significant financial incentives. But even small changes in behavior are greatly amplified by behavioral contagion — the social scientist’s term for how ideas and behaviors spread from person to person like infectious diseases. And if a carbon tax were to shift the behavior of some individuals now, those changes would quickly spread more widely.

Smoking rates, for example, changed little in the short run even as cigarette taxes rose sharply, but that wasn’t the end of the story. The most powerful predictor of whether someone will smoke is the percentage of her friends who smoke. Most smokers stick with their habit in the face of higher taxes, but a small minority quit, and still others refrain from starting.

Every peer group that includes those people thus contains a smaller proportion of smokers, which influences still others to quit or refrain, and so on. This contagion process explains why the percentage of American adults who smoke has fallen by two-thirds since the mid-1960s.

Behavioral contagion would similarly amplify the effects of a carbon tax. By making solar power cheaper in comparison with fossil fuels, for example, the tax would initially encourage a small number of families to install solar panels on their rooftops. But as with cigarette taxes, it’s the indirect effects that really matter….(More)”.

Behavior-first government transformation


Report by Deloitte: “…When experts try to explain why so many transformation initiatives fail, both in the commercial world and at government agencies, they rarely talk about habit or other human factors. It’s much easier to focus on a project’s most expensive, visible, or contentious elements, such as new technologies, process redesign, or changes to the organizational chart. But the human element can be crucial to the success of organizational transformation.

This is true when you’re aiming for transformation with a capital T, such as designing and implementing an entirely new operating model. It’s also true when you’re trying to make some aspects of an existing model work better, or when you’re trying to build a new capability. No matter what kind of change an organization wants to implement, it’s crucial to understand how the proposed changes will affect people as individuals, and what it might take—psychologically, emotionally, or politically—to make them change their behavior. After all, if people keep doing the same things in the same way, what has really been transformed?

Even when leaders understand that they need to encourage behavioral change, they often aim for that goal using strategies without a proven track record. For example, they might offer financial incentives to employees who meet certain performance targets, without clear evidence that this kind of reinforcement works in that context. What if the motivating factors that can overcome inertia in a certain situation have more to do with how employees feel about their work, or how they cohere as a community?

Fortunately, thanks to the work of behavioral psychologists and economists, as well as neuroscientists, we understand much more than we used to about human behavior and its drivers. This work has demonstrated, for example:

  • What typically motivates people—a sense of purpose, a sense of autonomy, and the ability to grow in one’s job1
  • Why people engage in “predictably irrational” behavior, and how we can harness this understanding to shape and nudge behavior2
  • How to use customer analytics and customer experience techniques such as human-centered design to drive workforce experience3

We also know that transparency can help a transformation initiative succeed. By keeping stakeholders informed about all aspects of the effort and inviting feedback, project leaders can gain insights into human motivation and behavior, and how their employees are experiencing the change, as those factors pertain to their particular project. This can help leaders understand which aspects of the transformation are working and which are not, and it helps to build trust among everyone involved.

“Behavior-first change” applies insights from a range of disciplines including anthropology, behavioral economics, neuroscience, and psychology to better understand and influence human behavior—and governments are beginning to apply it to their transformation initiatives. In fact, with more than 200 behavioral insights units in government worldwide, the public sector has been at the forefront of this movement. So, we’re not proposing a behavioral change approach as something radically new. Instead, we’re suggesting government agencies that might already be applying these techniques externally can systematically apply these insights to their own transformations—whether “capital T” programs or more focused efforts—to improve the chances that these programs will realize their intended outcomes….(More)”.

The $100 Million Nudge: Increasing Tax Compliance of Businesses and the Self-Employed using a Natural Field Experiment


Paper by Justin E. Holz et al: “This paper uses a natural field experiment to examine the effectiveness of specific nudges on tax compliance amongst firms and the self-employed in the Dominican Republic. In collaboration with the Dominican Republic’s tax authority, we designed messages for more than 28,000 self-employed workers and over 56,000 firms. Leveraging administrative tax data, we find evidence that our nudges (increasing the salience of prison sentences or public disclosure of tax evaders) have large effects on increasing tax compliance, primarily working through the channel of decreasing claimed tax exemptions. Interestingly, we find that firms are more impacted than the self-employed, and that firm size is critically linked to nudge effectiveness: larger firms are considerably more influenced by nudges than smaller firms. We find this latter result noteworthy given the paucity of evidence showing significant behavioral impacts of nudges amongst the largest players in a market. Overall, our messages increased tax revenue by $193 million (roughly 0.23% of the Dominican Republic’s GDP in 2018), with over $100 million constituting income that the government would not have received without our field experimental nudges….(More)”.

Nudging in Public Policy


Alice Moseley in the Oxford Research Encyclopedia of Politics: “Nudging” in public policy involves using behavioral, economic, and psychological insights to influence the behavior of policy targets in order to help achieve policy goals. This approach to public policy was advocated by Thaler and Sunstein in their book Nudge in 2008. Nudging is underpinned by a conception that individuals use mental shortcuts (heuristics) in day-to-day decision-making, shortcuts that do not always serve their long-term interests (for instance, in relation to eating and exercise patterns, road safety, or saving for the future). Nudging does not involve seeking to persuade individuals about the merits of pursuing particular courses of action that will better serve their long-term welfare. Rather, it involves altering the choice environment so that when people follow their instincts, using familiar mental shortcuts, the most prominent option available to the policy target will be one that is likely to promote their own welfare, and that of society more widely. Nudging has come to be considered a core part of the policy toolkit in many countries but academic scholarship has also debated the ethical dimensions of nudging, and there is a flourishing research literature on the efficacy, public acceptability, merits, and limitations of this approach within public policy….(More)”.

20’s the limit: How to encourage speed reductions


Report by The Wales Centre for Public Policy: “This report has been prepared to support the Welsh Government’s plan to introduce a 20mph national default speed limit in 2022. It aims to address two main questions: 1) What specific behavioural interventions might be implemented to promote driver compliance with 20mph speed limits in residential areas; and 2) are there particular demographics, community characteristics or other features that should form the basis of a segmentation approach?

The reasons for speeding are complex, but many behaviour change
techniques have been successfully applied to road safety, including some which use behavioural insights or “nudges”.
Drivers can be segmented into three types: defiers (a small minority),
conformers (the majority) and champions (a minority). Conformers are law abiding citizens who respect social norms – getting this group to comply can achieve a tipping point.
Other sectors have shown that providing information is only effective if part of a wider package of measures and that people are most open to
change at times of disruption or learning (e.g. learner drivers)….(More)”.

How behavioural sciences can promote truth, autonomy and democratic discourse online


Philipp Lorenz-Spreen, Stephan Lewandowsky, Cass R. Sunstein & Ralph Hertwig in Nature: “Public opinion is shaped in significant part by online content, spread via social media and curated algorithmically. The current online ecosystem has been designed predominantly to capture user attention rather than to promote deliberate cognition and autonomous choice; information overload, finely tuned personalization and distorted social cues, in turn, pave the way for manipulation and the spread of false information. How can transparency and autonomy be promoted instead, thus fostering the positive potential of the web? Effective web governance informed by behavioural research is critically needed to empower individuals online. We identify technologically available yet largely untapped cues that can be harnessed to indicate the epistemic quality of online content, the factors underlying algorithmic decisions and the degree of consensus in online debates. We then map out two classes of behavioural interventions—nudging and boosting— that enlist these cues to redesign online environments for informed and autonomous choice….(More)”.

Do nudgers need budging? A comparative analysis of European smart meter implementation


Paper by Sarah Giest: “Nudging is seen to complement or replace existing policy tools by altering people’s choice architectures towards behaviors that align with government aims, but has fallen short in meeting those targets. Crucially, governments do not nudge citizens directly, but need private agents to nudge their consumers. Based on this notion, the paper takes on an institutional approach towards nudging. Rather than looking at the relationship between nudger and nudgee, the research analyses the regulatory and market structures that affect nudge implementation by private actors, captured by the ‘budge’ idea. Focusing on the European energy policy domain, the paper analyses the contextual factors of green nudges that are initiated by Member States, and implemented by energy companies. The findings show that in the smart meter context, there are regulatory measures that affect implementation of smart meters and that government has a central role to ‘budge’, due to the dependence on private agents….(More)”.