rotmanmagazine.ca / 115timing of social transfers to the timing of charges for school
enrollment, or making it easier to buy fertilizer at harvest
time when cash is at hand, helps to overcome intention-to-
action divides for people who may be forgetful or possess
insufficient willpower (that is to say, most of us). Many devel-
opment policies that operate at the boundary of Economics
and Psychology can be understood in these terms.
Second, because decision making is often based on
only the most accessible and salient information — and is
also influenced by subtle social pressures and existing men-
tal models — peoples’ preferences and immediate aims do
not always advance their own interests. Individuals might
choose differently, in ways more consistent with their high-
est aspirations, if they had more time and scope for reflec-
tion. The assumption that we always make choices that pro-
mote our own interests — often a fundamental benchmark
for policy analysis—is misguided. But if decision makers do
at times require assistance, what guidelines are to be used
for the policy interventions aimed at shaping choice? We be-
lieve that governments should focus on the most important
freedoms, and in the development context, those include
freedom from poverty, disease, and oppression.
Third, socially-reinforced practices can block choices
that promote well-being and prevent individuals from even
conceiving of certain courses of action. Our Report argues
that social interdependence and shared mental models af-
fect choices, sometimes creating traps for communities and
individuals, including low trust, ethnic prejudice, and gen-
der discrimination.
You believe that behaviourally-informed approaches
and traditional economic interventions can be comple-
mentary—and that some of the biggest payoffs emerge
from adapting traditional interventions. Please walk us
through this.
Traditional interventions usually take two forms: incentives
and education/information. Incentives usually take the form
of changing prices in some way, or changing penalties asso-
ciated with rules. The key idea is that people don’t respond
to incentives plainly: they respond to incentives as they are
represented in their own minds. Sometimes, they forget
about the consequences of a certain behaviour and pay little
attention to it; or they might miscalculate the probabilities
associated with a penalty. This provides scope for chang-
ing interventions that highlight penalties. For instance, in
the tax compliance domain, people know that there’s a pen-
alty for non-payment, but if you highlight this fact, it might
change how they behave. If you think about it, virtually all
information can be made more salient, more timely and
easier to understand.How can leaders know if behavioural insights apply to a
particular project?
They would need to think through a few things. First, are
individuals aware of what they need to do, but unable to
accomplish it, or does a desired behaviour need to be acti-
vated? Second, are individuals motivated enough to nudge
themselves? Third, will more deliberation lead people to un-
dertake the desired behaviour, or are they already suffering
cognitive overload? And fourth, is the desired action not be-
ing accomplished because of a competing action, or due to
inertia? Consequently, should you aim to discourage a com-
peting action or encourage a target action?GINI has developed a five-step process to using behav-
ioural insights (see page 116). Which step have you found
to be the most challenging?
The most challenging is probably learning from piloting an
intervention (the fifth and last step), because time is always
short for policymakers and they tend to want things done
very fast. Carving out time for a pilot, especially one that has
learning embedded into it, requires a mindset change. We
have found it challenging to make the case to policymakers
about the importance of this step.People don’t respond to incentives plainly: We respond
to incentives as they are represented in our own minds.