Opinion – Pablo Acosta: Behavioral sciences can complement the traditional way of doing politics

Traditionally, managers develop public policies based on a rational economic agent, that is, a person capable of evaluating each decision, maximizing its utility for self-interest. But they ignore the powerful psychological and social influences that affect human behavior, and they ignore that people are fallible, fickle, and emotional: they have problems with self-control, they procrastinate, they prefer the status quo, and they are social beings. It is on the basis of this “not so rational” agent that the behavioral sciences are presented to complement the traditional way of doing politics.

For example, we are approaching the two-year mark since the World Health Organization declared a Covid-19 pandemic status on March 11, 2020. These have been challenging years for governments, businesses and individuals. But despite 2021 showing signs of recovery, there is still a long and arduous path to go to return to at least pre-pandemic conditions. Not only in health, but also in balancing economies, increasing productivity, resuming jobs, filling learning gaps, improving the business environment, fighting climate change, etc. Obviously, this is not a simple task for governments and organizations. Could we face these challenges differently and adapt the way of making public policies to make them more efficient and cost-effective, increasing their impact and reach?

The answer is yes. The success of public policies depends, in part, on decision-making and behavior change. Therefore, focusing more on people and the context of decision-making becomes increasingly imperative. It is important to consider how people relate to each other and to institutions, how they behave in relation to policies and to know the environment in which they are inserted.

The behavioral approach is scientific and combines concepts from psychology, economics, anthropology, sociology and neuroscience. Context-oriented and evidence-based, it reconciles theory and practice across multiple industries. Its application can encompass a simple change in the decision-making environment (choice architecture), a “nudge” to influence the best decision for the individual, maintaining freedom of choice, and it can be broader, aiming at changing habit. In addition, it can be key in addressing policy challenges such as school dropout, domestic and gender-based violence, paying taxes, reducing corruption, natural disasters, climate change, among others.

The use of behavioral insights in public policies is no longer new. More than a decade has passed since the publication (2008) of the book Nudge (“Nudge: How to Make Better Decisions About Health, Money and Happiness”, in Portuguese), which dramatically boosted the field. Concepts from psychology, already widely discussed and accepted for decades, were used in the context of economic decisions and, thus, economics/behavioral science was consolidated.

Following the expansion and relevance of the theme, the World Bank launched in 2015 the World Development Report: Mind, Society and Behavior. In 2016, it started its own behavioral unit, the eMBeD (Mind, Behavior and Development Unit) and has promoted the systematic use of behavioral insights in development policies and projects and supported several countries to solve problems quickly and scalably.

In Brazil, we have been training managers to use behavioral insights, contributing to research, such as the Research on Ethics and Corruption in the Federal Public Service (World Bank and CGU) and providing technical support in the identification of evidence, such as to inform solutions to increase savings among the low-income population. Our specialists also prepared behavioral diagnoses to understand why customers do not pay their bills on time or fail to connect to the sewer system. We carried out experiments with behavioral messages in order to encourage the use of digital payment methods and encourage the payment of bills on time in the water and sanitation sector. In the latter, presenting positive results with the possibility of increasing collection at a low cost, since the messages highlighting consequences and reciprocity, for example, increased payments on time and the total amount paid. For every thousand customers who received SMS with behavioral insights, six to 11 more customers paid the bills. For 2022, there are activities planned, as part of a development project, that will use behavioral insights to reduce waste disposal in drainage systems and increase conscious use of public spaces.

The behavioral sciences are not the solution to the great global challenges. But it is necessary to emphasize the potential of their complementarity in the construction of public policies. It is up to managers to take advantage of this moment of greater maturity in the area to expand their knowledge. It is also worth surfing the wave of the rise of complementary areas, such as cesign and data science, to focus on the individual and the context of the decision and, based on evidence and in a transparent way, influence choices and promote behavior change, in order to increase the impact of public policies in order not only to resume pre-Covid conditions, but to further improve the lives and well-being of all, especially the poorest and most vulnerable population.

This column was written in collaboration with my colleagues at the World Bank Juliana Neves Soares Brescianini, operations analyst, and Luis A. Andrés, program leader for the Infrastructure sector.