Go EAST

The Behavioural Insights Team (BIT) are encouraging policy-makers to shun the Pet Shop Boys’ advice…and go EAST not West.

 In their new report – EAST: Four simple ways to apply behavioural insights – the former Cabinet Office unit apply behavioural lessons to overcome policy problems.

 When developing policy, applying the principles that BIT recommend has huge potential to help local authorities improve the quality of service that they offer, at a lower cost. For example, it can help manage demand and shift service users to more cost-effective communications channels. BDO has already done some exciting work with a number of local authorities on applying the principles of behaviour change to customer services with encouraging results.

 EAST of Eden

 First, what is EAST and how does it work?

Adapting the delivery of public services to make them EASY harnesses the power of defaults – people, like electrical currents, choose the path of least resistance – and simpler messages. People are more likely to do something if it is easier to do so. Auto-enrolment into pension schemes is a classic example, and has increased scheme participation rates from 61% to 83%.

 An ATTRACTIVE intervention grabs attention and rewards favourable behaviour. The service user wants to do what the authority sending the letter is seeking. The interests of state and citizen are aligned. Letters to non-payers of car tax which suddenly contained a picture of the offending vehicle certainly grabbed attention. Consequently payment rates rose by 9%.

As humans we are SOCIAL animals. Policies can capitalise on this in part by showing that most people perform the desired behaviour. If 89% of people on our street recycle correctly then we instinctively don’t want to be part of the 11%. Amazon tells you ‘other people who bought this item’ for a reason.

Finally, a TIMELY intervention is an effective intervention. As the saying goes ‘timing is everything.’ Making people act when they are most receptive gets results. The first visit to the JobCentre counts because the job-seeker’s proximity to the Labour market and enthusiasm for their job hunt are shown to be at their highest early-on and dwindle over time.

Too good to be true?

However, is EAST and the wider behavioural economics movement too good to be true?

The commitment of behavioural science advocates treading in the footsteps of Richard Thaler, Cass Sunstein and Daniel Kahneman can border on the evangelical… especially for a discipline which critics suggest is just common-sense. Shifting to opting out of organ donation rather than it isn’t rocket science and it doesn’t require a PhD in economics to predict a consequent rise in available organs.

Perhaps more fundamentally, there is a danger that behavioural economic frameworks such as EAST offer a fig leaf of radical change but in fact make less change than a traditional economic theory might. Economist Tim Harford has pitted the effectiveness of behavioural and traditional economics against one-another in cutting household energy use. Sharing data with users on their consumption as against people in their local area may cause a small reduction in use, but would arguably pale into insignificance compared to a more traditional economic instrument – rapidly rising bills. As Harford suggests “the appeal of a behavioural approach is not that it is more effective but that it is less unpopular.”

In addition, behavioural economics, whether it is applied to visiting a JobCentre to shopping in Sainsbury’s, is always at risk of underestimating the rich diversity of human culture and behaviours. Will different nationalities, cultures, religions and social demographic groups respond in the same way to the same intervention? Almost certainly not. Equally, as BIT reflect in their own report, the tricky question is who decides what a ‘default’ behaviour should be?

The story continues…

These are far from insurmountable problems. Yes, some elements put forward by the EAST approach are common-sense, but equally, if they were that obvious these approaches would have been used years ago…they weren’t. Equally, it’s true that behavioural economics may sometimes achieve less than its educational forefather but everybody involved in public services knows that politics is the art of the possible and policy requires taking people with you. Finally, of course any theory which requires the setting of social norms contains vexed questions, but as the developers of EAST note, these can be decided through consultation and the democratic process.

EAST offers a simplified and exciting tool for policy-makers looking to apply the principles of behavioural science. It is not a panacea but does have huge potential.

AL

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