Behavioural Insights and Public Policy: Lessons from Around the World

"Behavioural insights can no longer be seen as a fashionable short-term foray by public bodies. They have taken root in many ways across many countries around the world and across a wide range of sectors and policy areas."

This use of behavioural sciences has become commonplace in many countries to help institutions design, implement, and enhance interventions across a range of sectors, such as health, telecommunications, environment, energy, consumer protection, and taxation. Governments apply "behavioural insights", or insights derived from the behavioural and social sciences, with the aim of making public policies work better. The application of behavioural insights to policy often involves the use of experiment and observation to identify patterns of behaviour and to challenge established assumptions about what is thought to be the rational behaviour of citizens and businesses. This report from the Organisation for Economic Co-operation and Development (OECD) discusses the use and reach of behavioural insights, drawing on a collection of over 100 applications across the world and policy sectors. It suggests ways to ensure that this experimental approach can be successfully and sustainably used as a public policy tool.

The OECD and the London School of Economics, in collaboration with ideas42 and the European Nudging Network (TEN), developed a survey and derived a series of case studies from across the world to build on the work that is being independently carried out by central and local governments, administrative and regulatory agencies, and legislators. The bulk of the results is included in this publication, with case study chapters focused on: consumer protection, education, energy, environment, financial products, health and safety, labour markets, public service delivery, and telecommunications. Potential areas for further exploring the application of behavioural insights include implementation and enforcement by public governance institutions, as well as decision making in public bodies such as (independent) regulatory authorities.

Here is an example of a case study included in the book. In 2012, New Zealand's Inland Revenue (IR) had a high average sick leave usage rate: 11.2 days. Flu vaccinations are a method to reduce flu-related absence. Participating in IR's offsite flu vaccine programme had several potential obstacles, such as taking time off from work to go and get the vaccine. In 2013, 1,700 IR staff members obtained the flu vaccine voucher, yet only 1,250 vouchers were redeemed. IR set out to close this 30% intention gap by sending a personalised email to employees that encouraged them to have the flu vaccination. The language used in the email was based on insights taken from behavioural science, intended to nudge the employees into action. The behavioural techniques used were as follows: personalisation; active choice; and reward. The location of the flu vaccinations was also changed to being administered at the place of work. In the offices where the behaviourally-informed changes were made, the vaccination uptake increased by 75%, and the intention gap between those who obtained the vouchers to receive their flu vaccine and those who actually redeemed them decreased by 60%. The intervention resulted in 33% of eligible IR employees getting the flu vaccine in 2014, compared with 19% in 2013.

The report recommends that public institutions and practitioners:

• Consider applications of behavioural insights to the formal rules and practices that govern the work of public organisations to strengthen the effectiveness of these organisations.
• Broaden the application to include the behaviour of regulated firms - for instance, energy consumption for large industrial firms.
• Develop consistency in the organisation, methodologies, quality controls, and capacity support functions of the different behavioural initiatives.
• Encourage the development of knowledge and capacity among public officials to understand and apply behavioural insights within public bodies - for example, through mainstreaming, training, and information provision.
• Take into consideration behavioural insights when designing and evaluating policy implementation.
• Develop processes to determine when there is a behavioural issue that can be successfully addressed through the application of behavioural sciences. Equally, determine when a behavioural intervention may not be appropriate, and understand why.
• Exploit the full potential of behavioural insights as a tool for engaging with stakeholders, and collect feedback on what works.

To ensure that the continued use of behavioural insights by public bodies is shielded from abuse or unethical utilisation - or perceived to be so - the report suggests behavioural practitioners in public policy should:

• Engage in a multi-staged strategy for implementing behavioural insights, with a menu of types of assistance.
• Undertake robust calculations before engaging in testing and experimentation to ensure the use of sufficiently large sample sizes, so that effects can be detected; it is also necessary to understand the limitations of data for public policy.
• Replicate results to ensure the observed results are correct in the same context and setting (internal validity), and test the application of the same approach to other contexts and settings (external validity).
• Consider applications that could work for a part of the population but not for the entire population (segmentation), and whether these applications can be implemented, given the legal and cultural context.
• Conduct ongoing monitoring to identify short- and long-term effects.
• Publish work (successful and unsuccessful trials) to foster transparency and accountability, as well as to inform the actual practice of applying behavioural insights, by disclosing and understanding more about the actual costs (to be compared against the benefits) of applying behavioural insights.