Working to make government more effective


MINDSPACE grows up

Behavioural economics in government.

There is no need to look at the top of the IFG publication charts when they come out. They are always topped by MINDSPACE – our guide to applying behavioural insights to policy – originally published in March 2010, but which, by the end of 2013 had been downloaded over 13,000 times.

The report was originally commissioned by the last Labour government which hasn’t stopped a few members of the current opposition expressing degrees of scepticism about the way in which this government has enthusiastically taken up its techniques. The soon to be spun-out Behavioural Insights Team, established by David Cameron under MINDSPACE author, and former IFG Research Director, David Halpern, has even managed to be described as 'creepy', 'controversial' and 'sinister'. At the same time, it has attracted much overseas interest and has even inspired the establishment of a unit in the intellectual home of 'nudge' - the US. The White House launched its own team in late 2013 and the Unit was the subject of a recent fawning story in the New York Times – not normally a place to go for write-ups on machinery of government innovations in another country.

So are people right to be concerned about the increasing interest of governments in applying behavioural insights to policy? Or has MINDSPACE changed the way we do policy for the better?

Looking at some of the areas tackled by the Behavioural Insights Team so far in the UK it is hard to see what the problem is. Areas explored have been getting people who owe tax to pay up more promptly, reducing the barriers to undertake loft insulation which can cut energy bills and promote carbon reduction, getting people to pay fines with less hassle, improve outcomes for the unemployed in jobcentres and make government websites more effective. Last year, it was announced that a £30m BIS initiative on business support would be run as a randomised control trial before any decisions were made on wider roll-out and just before Christmas the behavioural insights team released the results of a large randomised control trial on prompting opt-ins to organ donation – with the potential to increase donations by 100,000 a year by better messaging. But the most significant success so far – one which dates back to the pension reform developed by the Turner – has been to change the pensions default to promote auto-enrolment. The two millionth person has just enrolled in the scheme after its launch in 2012.

The big mistake the detractors make is to assume these are areas where government can be a neutral non-actor. But that is rarely the case. By making pensions enrolment an active choice, and therefore non-enrolment the default, the government connives in knowing that a lot of citizens who would be better off in a pension scheme, and say they want to save more, will leave that for another, too late, day and face poverty in old age. Other taxpayers have to bear the costs of the government sending out ineffective letters that fail to persuade people to cough up tax or fines, or fail to show up at court. And badly thought out campaigns simply waste money – meaning more has to be spent to achieve the same effect.

The truth is that government policies always have to be translated into real world actions. The real issue is whether that is done in a thoughtless and arbitrary way – or whether government puts conscious effort into designing policies to work. Applying behavioural insights – and testing their impact – is simply a way of making policy design more than the accidental result of someone’s hunch. There need to be some rules and safeguards – government shouldn’t make up social norms, for instance, or mislead people for a secondary purpose, however worthwhile. And it needs to be transparent about its goals. But subject to that, measures which amplify the effectiveness of policies at low or no cost should be a no-brainer.

Prediction – as governments worldwide struggle to make their policies more effective for less money MINDSPACE will still lead our 'bestseller' chart at the end of 2014.

Institute for Government

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