Rotman Management — Spring 2017

rotmanmagazine.ca / 7

FROM REVENUE COLLECTION to trade policy to infrastructure
investment, the varied mandates of government are complicat-
ed and diverse. Yet at its core, the role of government is simple:
To maximize the welfare of citizens by improving their well-
being, creating fair and efficient marketplaces and planning for
the future.
Governments attempt to accomplish this by helping citi-
zens, organizations, their own agencies and local businesses
make good choices. As such, the government — just like every
other organization that exists — is in the business of behaviour
change. Indeed, almost every activity that a government under-
takes boils down to the need to encourage or discourage certain
behaviours. There are four particular types of behaviour change
that policymakers focus on:

1.COMPLIANCE. Getting people and businesses to behave in accor-

dance with prescribed standards and by certain deadlines.

2.CHOICE SWITCHING. Encouraging citizens to perform certain

tasks online or to save for the future.

3.CONSUMPTION. Promoting consumption takes many forms —

from getting seniors to consume their medications to getting

young people to eat healthily.

4.ACCELERATION OF DECISIONS. In many situations, officials want

to accelerate decision making in important areas — e.g., for

businesses to start implementing environmentally-friendly

policies.

Given the centrality of behaviour change to virtually everything

governments do, it is a matter of great surprise that until recently,

most governments had scarce capabilities in the science of behav-

iour — or, as it is referred to nowadays, Behavioural Economics.

Sure, every government has a chief economic advisor and cadres

of traditionally-trained economists who develop and implement

policy; but since the ultimate goal of every governmental policy

Policy by Design:

The Dawn of Behaviourally-

Informed Government

Governments from Canada to Singapore are embracing findings

from Behavioural Economics to improve the lives of their citizens.

by Dilip Soman, Katie Chen and Neil Bendle