Zahir Shah highlights how understanding human behaviour can lead to more effective and sustainable policymaking to tackle today’s complex global issues and discusses the need for governments to integrate behavioural insights into their strategies.
Governments around the world are facing increasingly complex challenges that cannot be addressed with traditional policymaking methods. From millions of out-of-school children to health crises and environmental challenges, including what is now termed as ‘global boiling’, the issues the world faces today, especially in the Global South, require a deeper understanding of human behaviour. Incorporating behavioural science can help address these issues by offering powerful tools to understand human behaviour and develop policies that nudge citizens towards more optimal actions. To fully harness the potential of behavioural insights, every government should consider establishing a dedicated Behavioural Insights (BI) unit.
The Evolution of Behavioural Insights Units
Since the UK launched the world’s first government-embedded behavioural insights unit in 2010, many similar institutions have emerged globally. Despite varying missions, models, and methodologies, these organisations share a common goal: supporting their governments and policymakers in understanding what drives human behaviour and using this knowledge to improve public policy and decision-making. Strong statistical evidence from these institutions shows that integrating behavioural science into governance is essential for developing effective and sustainable policies.
Why is it important?
Behaviourally informed policy emphasises the importance of context in decision-making and behaviour. It examines the economic, psychological, and social factors that influence what people think and do, and, more importantly, why they think and act that way. The behavioural science approach addresses aspects of bureaucracies, technology, and service delivery often overlooked in traditional policy design. This can significantly impact the effectiveness of public sector development programmes and projects, especially in developing countries. By providing innovative solutions to complex challenges, often at low cost, behaviourally informed policies have the potential to greatly enhance the delivery of public services and societal outcomes. Techniques such as choice architecture, social norms interventions, and strategic use of defaults can create environments that encourage optimal behaviour among citizens.
Success stories: From the UK to Indonesia to Mexico
The application of behavioural science to governance is often credited to the United Kingdom, with the establishment of the Behavioural Insights Team (BIT) in 2010, also known as the ‘Nudge Unit’. This strategy marked a significant shift in the UK government’s approach to policymaking. One well-known example of their success is a controlled experiment aimed at improving tax compliance. The team discovered that adding location-specific normative messages to tax reminder letters significantly increased the number of people who paid their taxes. The more specific the letters were to the recipients’ location, the more successful they were, with the most effective letters improving tax compliance by 15% compared to those without normative messages. This example demonstrates how leveraging behavioural insights can lead to significant improvements in government policy outcomes.
The success of using behavioural insights for public policy is not limited to developed countries like the UK. A powerful example from Indonesia involved the BIT team conducting a large-scale randomised controlled trial with 11.2 million taxpayers to encourage early filing of tax returns. In many developing countries, a significant proportion of tax returns are filed at the last minute. The team evaluated the impact of email prompts on the proportion of tax returns filed at least two weeks before the deadline and the overall filing rate. The trials showed a significant increase in early and overall filings among those who received a simplified email prompt. This example underscores the effectiveness of simple, behaviourally informed communication in driving timely tax compliance and highlights the impact of behavioural science in addressing large-scale policy challenges in a developing context.
In Mexico, a team of experienced behavioural scientists used various interventions to promote financial inclusion and encourage the use of formal digital financial services among beneficiaries of the Prospera conditional cash transfer programme. By incentivising agents with simple rewards like caps, thermos bottles, and folders, the experiment tripled the number of beneficiaries who made digital transactions at agent banking points (i.e., retail outlets authorised to perform banking services). This example further demonstrates how simple, well-curated behavioural nudges can significantly improve the effectiveness of large-scale, government-run social programmes in a developing context.
The growing importance of and interest in the ‘Why’: Personal Experience
Through my work with governments and various departments across the world—whether on electricity consumption, financial inclusion, tax compliance, sanitation and hygiene, or other critical issues—the importance of establishing Behavioural Insights units at both national and sub-national levels has become increasingly evident. During meetings with government leaders, the conversation often centres on what people think and do. However, these leaders are increasingly interested in understanding the ‘why’ behind these behaviours. Despite this growing interest, a gap in understanding the ‘why’ often remains, which can impede the development of policies that effectively address the root causes of undesirable behaviours.
This is precisely why governments need to establish Behavioural Insights units. These units equip governments with the necessary tools to design policies that are not only reactive but also proactive by exploring the psychological and social drivers of behaviour that are often overlooked. Investing in behavioural research and BI units allows governments to bridge the gap between knowing what people do and understanding why they do it, enabling policymakers to influence behaviour in ways that align with their policy goals.
BUT Government Ownership is the most imperative!
It is essential for governments and public policymakers to recognise that the success of these Behavioural Insights units depends on more than just their creation. Governments must take ownership of the social and behavioural change agenda in their country. While international aid and external non-governmental organisations and consultancies can provide valuable support, true and sustainable change can only be achieved when governments themselves lead the integration of behavioural science into their core policymaking processes.
Ownership means that governments can tailor interventions to the specific needs and contexts of their population, as well as take the lead on social and behavioural interventions. By fully owning the development of a holistic programme that integrates behavioural insights into every stage of policy design and implementation, governments can achieve a deeper understanding of ‘why people think and act as they do’, resulting in policies that are more likely to achieve the desired outcomes.
For governments in the modern world, integrating Behavioural Science into governance through the establishment of Behavioural Insights units is a necessity, not just a strategic advantage. The successful examples observed in both the developed and developing worlds provide convincing evidence that understanding the ‘why’ behind human behaviour can lead to more effective and sustainable policy outcomes. Therefore, the question should no longer be whether to integrate behavioural science into policymaking by establishing Behavioural Insights units, but rather how soon it can be done.
The views expressed in this post are those of the author and in no way reflect those of the International Development LSE blog or the London School of Economics and Political Science.
Featured image credit: www.themarcomavenue.com.
