Across the globe behavioral insights are being used to craft more effective policy solutions at all levels of government—but what are “behavioral insights,” and how can they be used to improve public policy? Many policies are based on notions of how people should behave and the idea that consumers and firms are rational in their behavior. Yet both individuals and organizations make many decisions that systematically depart from what we think of as rational - so policies based on this can be ineffective or even backfire. Using insights gleaned from behavioral economics, psychology, and other social sciences, we can craft better policies based on an understanding of how people actually do behave.
Applying Behavioral Insights to the Design of Public Policy will illustrate the factors that drive individual behavior in different contexts and how behavioral science can be used to design more effective public policy solutions for problems, both big and small. Taught by leading Harvard experts, these behavioral insights can then be used to inform the development of nontraditional policy tools (e.g., defaults, active choice, social norms, framing, and choice architecture) that can be more impactful and cost effective than traditional policy tools.
Examples of BI interventions:
Health: Many European countries mandate only plain packaging for tobacco products. In Latvia, this was combined with an app providing a calculation of the daily, monthly and annual savings that can result from cutting down smoking, and posed the tradeoff for attractive goods, such as laptops and mobile phones.
Zero Waste: Spare or soon-to-expire food is collected from participating restaurants, hotels and supermarkets in Portugal, and delivered to distributing centers to cater for the needs of poorer families. The "Zero Waste” project uses behavioral levers such as framing (e.g. slogan “Portugal cannot give itself to waste”), reciprocity, and salience (participating entities receive a “Zero Waste” label to help citizens identify them). The project has so far distributed over 2,300,000 meals.
Pensions defaulting: In the UK, a reform that required employers to automatically enroll employees in a pension plan increased participation by 20%. This behavioral tool is now mandated to be rolled out in the private, as well as public, sector employers.