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Filed under: Development Social innovation

People taking the escalator to the fitness centre

This is the first in a series of blog posts dedicated to behavioural science for development. Also see: 
Part IV: Behavioural science and development: More practical examples
Part III: Behavioural science and development: How about some practical examples?
Part II: Behavioural science and development: A reading list

Why behavioural science?

I would like to answer this question with another question: why (not) try something new? As development practitioners, we might have the feeling that our work does not always bring the results we had hoped for. Sometimes it also becomes too self-centered, and we can’t see forest for the trees.

The inefficiencies of aid agencies are not only well-documented, but they are also quite expensive. (See: William Easterly’s Rhetoric versus Reality: The Best and Worst of Aid Agency Practices (pdf))

(However, if you are fully happy with the results of your work, you really should stop reading further and I apologize for wasting the time that could be used for achieving results.) :)

If you are still with me, let’s face facts:

(a)   We do not always achieve results we aim for;

(b)   Aid money is becoming more and more scarce;

(c)   To effectively deliver on our mission and to remain relevant, we need to solve (a) and (b).

Here is where behavioural economics comes in.

  1. It can often offer inexpensive solutions, which can bring about better development results.

  2. It may not only bring about desired change, but also save money in the process. Let us look at two examples to illustrate the point.

How does it work in practice?

Take for instance the farmers in Kenya or Malawi not using fertilizer and thus having crop losses. What would a typical public authority or aid agency do to solve the problem?

  • Fertilizers are probably too expensive – so they might subsidize, or help pay for them. Still, it doesn’t work.

  • They might inform farmers about the usefulness of fertilizer (they may simply not know this) – and carry out a massive farmers’ awareness raising campaign.

Mission accomplished? Nope, unbelievable, it still didn’t work. The beneficiaries didn’t budge.

Puzzling, isn’t it? We spend a lot of money, but farmers living in poverty are still not using fertilizer and losing crops. Here, we are on something, right? It’s like failing to pass the last mile

Behavioural economics actually diagnosed two issues requesting two separate solutions. In Kenya, farmers delayed buying fertilizer because of the minor cost of traveling to town to get fertilizer.

Solution: home delivery. Use of fertilizer rocketed by 70 percent.

In Malawi, despite intending to buy fertilizer, farmers didn’t manage their spending in the period between harvest: After they sold their produce and had money, they didn’t have an immediate need for fertilizer until it came time to plant their crops, when the harvest money had been spent.

Solution: offer farmers special accounts dedicated account to lock up money after harvest until planting.

Worth emphasizing: farmers themselves are choosing to lock up their money.

Let’s look at the UK. The UK Government’s “Nudge Unit” helped the state collect £200 million more income tax by telling late payers on tax forms that most people in their towns had already paid their tax.

Our national partners are facing austerity budgets and it looks like we can help them deal with it.

Obviously, behavioural economics is no panacea – and it doesn’t lack critics.

But could it add value to our work, particularly because people are humans (who often make irrational or unconscious decisions and sometimes with limited cognitive capacity), and not rational econs?

In other words, programs work better when they are designed to match peoples’ actual psychology.

Let’s try it!

It is to answer the above questions that we will soon be holding a “R&Devent in Bratislava, focusing on behavioral science and gamification for the design of public policies and development projects.

We are planning to bring together renowned practitioners, development experts and policy makers for a “learning-by-doing” experience: lectures will be accompanied by hands-on sessions focusing on prototyping projects that can be carried out.

We are also hoping to have a healthy dose of devil’s advocates who will question assumptions and point to any shortcomings in our thinking.

Are you a development practitioner or a policy maker using behavioural science in your work? Interested in joining our journey? We would love to hear from you.

  • Nicolas Giroux

    Hi Alex,
    Put it this way it makes me think of Esther Duflo’s work in her book “Poor Economics” especially when saying “programs work better when they are designed to match peoples’ actual psychology”. She gives a very similar example about the use of fertilizers by Kenyan farmers.
    And regarding this specific example I have one question: do you know what kind of fertilizer we are speaking about?

  • http://twitter.com/AlexOprunenco Alex Oprunenco

    Hi Nicolas

    I guess this is the same example. The one from the blog is taken from “Nudging farmers to use fertilizer: theory and experimental evidence from Kenya” by E. Duflo, M. Kremer, J. Robinson, you can download it following hyperlink in the blog. I guess it “migrated” from paper to the book.
    Re your question on the type of fertilizer, the paper states: “Based on evidence from experimental model farms, the Kenyan Ministry of Agriculture recommends that farmers use hybrid seeds, DiAmmonium Phosphate (DAP) fertilizer at planting, and Calcium Ammonium Nitrate (CAN) fertilizer at top dressing (when the maize plant is knee-high, approximately one to two months after planting)…

    • Nicolas Giroux

      Ok, thanks for the answer!

      I made a quick research, I didn’t find any relevant information about these fertilizers regarding health consequences and economic sovereignty (who produce them, at what price). Neither did I about these hybrid seeds and the relevance of using them in such region…

      I will hopefully find out more.

      In any case, we must be careful of what policy behavioural economics is supporting, and pay attenton to who we are actually benefiting down the line. If some multinational company gets richer, population sicker and biodiversity more endangered, it means we would fail in our attempt to improve people lives and build resilient nations.

      • http://twitter.com/AlexOprunenco Alex Oprunenco

        you couldn’t be more right. the insights from behavioral science can be used for good or bad!…

  • Chris

    Hi Alex, the field of health has been using behavioural economics for a number of decades to improve lifestyles and promote health. The results are mixed. Especially when it comes to reducing development gaps and health inequities. We did a nice review of behaviour change for health in 2009 which you may be interested in. It summarises 4 main approaches based on principles of behavioural economics that ought to be combined if we want to create the conditions for change. If your interested in a copy drop me a message to chb@ihd.euro.who.int. If you have not already looked into the literature on Nudging, a branch of behavioural economics, then suggets you do, this is something that government and policy makers like the sound of but in reality has as many limitations as it does benefits….. most limitations apply in resource constrained families & communities.

    • http://twitter.com/AlexOprunenco Alex Oprunenco

      Hi Chris, many thanks for your comment. I referred to one WHO study (http://apps.who.int/rhl/hiv_aids/cd009756_sharmap_com/en/index.html) in my forthcoming blog, however, you might me talking about different one. Btw, in Moldova we might try to test mobile technologies in medication non-adherence for HIV/AIDS and TB patients.

      On Nudging…well, actually our research on behavioral economics was nudged by that interesting book. I will drop you a message and it would be interesting to learn more about what you are doing in the field.

      Btw, you might be interested i joining our forthcoming R&D (I would call it also learning by doing event as we will focus extensively on concrete cases) event on behavioral economics here in Bratislava…

  • Zuzana

    Hi Alex,

    I would be interested in the workshop in Bratislava (20. – 21. June) but I haven´t found any particular information about time, place, etc. Could you, please, let me know where to find it? Thank you very much in advance.

    Best,
    Zuzana

    • Alex Oprunenco

      Hi Zuzana,

      thanks for your interest. To learn more details please contact directly my colleague, Denisa Papayova, denisa.papayova@undp.org. thanks.

      • Zuzana

        Dear Alex,
        thank you very much.
        Best,
        Zuzana