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Q

&A

The World Bank’s Global INsights Initiative (GINI) was

formed to put the key findings of your World Development

Report into practice. Please summarize those findings.

The main message that came out of that report was that de-

velopment policy is due for a redesign, based on a more re-

alistic understanding of how people think, behave and make

decisions.

In contrast to the rational model — whereby people have

unlimited computational power to make rational decisions

on the basis of consistent and self-interested preferences

and explicit information — realistic thinking is very differ-

ent. It relies on three principles: We usually think automati-

cally and fast; we are highly influenced by our environment

and by social norms; and explicit and implicit information

derived from our worldviews (i.e. mental models) affect how

we interpret information and make decisions. In the report,

we emphasized that everyone thinks this way — not only end

users and consumers, but policy makers, heads of compa-

nies, and even heads of state.

Put simply, decision making is highly contextual.

You might typically assume that if you raise the price of

The World Bank is now

using behavioural insights

to tackle wicked problems.

Interview by Nina Mažar

QUESTIONS FOR Varun Gauri, Senior Economist, The World Bank