Topics: INSTITUTIONAL INNOVATION

The Economist: “In 2013 thousands of school pupils in England received a letter from a student named Ben at the University of Bristol. The recipients had just gained good marks in their GCSEs, exams normally taken at age 16. But they attended schools where few pupils progressed to university at age 18, and those that did were likely to go to their nearest one. That suggested the schools were poor at nurturing aspiration. In his letter Ben explained that employers cared about the reputation of the university a job applicant has attended. He pointed out that top universities can be a cheaper option for poorer pupils, because they give more financial aid. He added that he had not known these facts at the recipient’s age.

The letters had the effect that was hoped for. A study published in March found that after leaving school, the students who received both Ben’s letter and another, similar one some months later were more likely to be at a prestigious university than those who received just one of the letters, and more likely again than those who received none. For each extra student in a better university, the initiative cost just £45 ($58), much less than universities’ own attempts to broaden their intake. And the approach was less heavy-handed than imposing quotas for poorer pupils, an option previous governments had considered. The education department is considering rolling out the scheme….

Some critics feared that nudges would do little good, and that their effects would fade over time. Others warned that governments were straying perilously close to mass manipulation. More recently, some of the findings on which the behavioural sciences rest have been questioned, as researchers in many fields have sought to replicate famous results, and failed.

By and large those doubts have been allayed. Even if specific results turn out to be mistaken, an experimental, iterative, data-driven approach to policymaking is gaining ground in many places, not just in dedicated units, but throughout government.

Nudging is hardly new. “In Genesis, Satan nudged, and Eve did too,” writes Cass Sunstein of Harvard University. From the middle of the 20th century psychologists such as Stanley Milgram and Philip Zimbardo showed how sensitive humans are to social pressure. Daniel Kahneman and Amos Tversky described the mental shortcuts and biases that influence decision-making. Dale Carnegie and Robert Cialdini wrote popular books on persuasion. Firms, especially in technology, retail and advertising, used behavioural science to shape brand perception and customer behaviour—and, ultimately, to sell more stuff.

But governments’ use of psychological insights to achieve policy goals was occasional and unsystematic. According to David Halpern, the boss of BIT, as far as policymakers were concerned, psychology was “the sickly sibling to economics”. That began to change after Mr Sunstein and Richard Thaler, an economist, published “Nudge”, in 2008. The book attacked the assumption of rational decision-making inherent in most economic models and showed how “choice architecture”, or context, could be changed to “nudge” people to make better choices…..

Now many governments are turning to nudges to save money and do better. In 2014 the White House opened the Social and Behavioural Sciences Team. A report that year by Mark Whitehead of Aberystwyth University counted 51 countries in which “centrally directed policy initiatives” were influenced by behavioural sciences. Non-profit organisations such as Ideas42, set up in 2008 at Harvard University, help run dozens of nudge-style trials and programmes around the world. In 2015 the World Bank set up a group that is now applying behavioural sciences in 52 poor countries. The UN is turning to nudging to help hit the “sustainable development goals”, a list of targets it has set for 2030….

Among the most effective nudges are “social” ones: those that communicate norms or draw on people’s networks. A scheme tested in Guatemala with help from the World Bank and BIT tweaked the wording of letters sent to people and firms who had failed to submit tax returns the previous year. The letters that framed non-payment as an active choice, or noted that paying up is more common than evasion, cut the number of non-payers in the following year and increased the average sum paid. And a trial involving diabetes shows that it matters to nudge at the right moment. In 2014 Hamad Medical Corporation, a health-care provider in Qatar, raised take-up rates for diabetes screening by offering it during Ramadan. That meant most Qataris were fasting, so the need to do so before the test imposed no extra burden….(More)”.