Behavioural policy making – A possible way out

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The term “policy” is with mankind for a long time. It is explained as a predetermined course of action adopted for the sake of expediency. The term policy is closely related with polity and hence politics. On a broader level, the term is highly general in nature and is used frequently. However, a properly designed policy aimed at the right direction is extremely powerful and can cast catastrophic impact on the target group. Policies can be of great diversity and can have a varied impact. This discussion will stick only to policies targeted to impact the behaviour of the target group.

The areas dealing with behavioural decision making and psychology dates back to a long time. Here we will try to revisit its significance or futility in the current scenario. The current crisis has demanded serious policy designed to strengthen the healthcare sector. Policies aimed at altering human behaviour in the health domain is not new. Taxing harmful substances and subsidising necessary commodities like medicines and vaccines have been implemented for a time now. “Nudging” is being excessively devised in order to alter people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. Both in US (White House Social and Behavioural Science Team) and UK (Behavioural Insights Team) the government has established departments to observe and analyse behavioural policy.

As human decision making is heavily influenced by biases like time-inconsistent preferences, bounded rationality, status quo bias, framing effects, availability heuristic, and social norms policies designed to improve and alter the decision should also take them into account. For example, bounded rationality is forced on a decision due to the lack of information, cognitive limitations, and a finite amount of time to make a decision. In order to mitigate such a bias, information regarding the concerned event can be presented in a simplified orderly pattern. Similarly, in case of a status quo bias, decision-makers demonstrate inertia, and tend not to deviate from the default option or reverse their previous decisions. In this scenario, proper well planned incentive can be implemented that would instigate the decision-maker to move towards a superior equilibrium. In case of availability heuristic, people estimate the odds of a particular event occurring by how easily an instance of the same comes to mind. Diseases or conditions faced by a friend or which are the topic news coverage and advertising tend to increase individual’s perception of their personal risk of the disease. This effect is both positively and negatively cultivated by the policy-makers in order to gain. Often, an image is planted on the decision-makers’ brain that is associated with a particular event. By doing this, pushing the people towards the desired direction becomes easier. 

The role of nudging in healthcare

The current scenario has left the healthcare sector in immense stress. Development of healthcare infrastructure demands long gestation period and cannot be matched with the pace with which a pandemic spreads. As a result, the overall human behaviour plays a crucial role in such situation. The biases mentioned earlier resides at the core of decision making and they need to be mitigated. What nudge actually does is explore, understand, and explain existing influences on how people behave, especially influences which are unhelpful, with a view to removing or altering them.  Nudge theory is primarily concerned with the choice designing strategies, which influences the decision. Nudge theory suggests that the designing of choices should be determined by how people actually think and decide based on instinct and irrationally, rather than how traditionally believed that people think and decide logically and rationally which are often incorrect.

The question that arises now is that how can policy-makers design the proper nudge to move to a superior situation? The first thing that should be kept in mind while deciding on this is what are the required or expected outcomes under such a pandemic scenario? As the situation demands certain precautionary measures, nudges should be designed to push people towards adopting such measures. Nudges can be social, financial or legal. Social stigma plays a strong role in certain parts of the world and therefore can be subtly used to push people. Again, financial nudges, both positive and negative, like fines and subsidies can also nudge people to adopt safety measures. Often a mix of financial and legal policies are used as a nudge to enforce safety protocols into the behaviour. The concern here is in terms of the extent of the nudge. As experienced in many parts of the world, nudging towards safety measures like social distancing has backfired into severe clashes with the infected when media has overemphasised on the nudge.

So, what so we conclude from such situation. There is no denying the fact that nudges are extremely essential in such scenarios when there is a need for a behavioural shift. However, such shifts needs to be well planned by the governments by testing hypothesis using data and field survey results. Ill-planned nudges can have severe reverse effects which could not be easily undone. But, the first and foremost step towards adopting a behavioural shift regime is to nudge people to believe and understand the future pathway or commonly called the “new normal”. An effort to consistently compare and target the past standards could cause a lot of disruptions in the road to deal with the pandemic. A pandemic of such spread should not be dealt with the constraint that mentions achievement of the pre-pandemic levels as the primary target. Decision-makers should be nudged towards the achieving the post-pandemic desired target and choices should be designed to facilitate such an action plan.    


References

  1. Matjasko, J., Cawley, J., Goering, M., Yokum, D., Applying Behavioural Economics to Public Health Policy: Illustrative Examples and Promising Directions
  2. Dutta, S., Mullainathan, S., Behavioural design: A new approach to development policy

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