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.
It can often offer inexpensive solutions, which can bring about better development results.
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&D” event 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.