Easy Ways to Fix Government
In 2010, U.K. Prime Minister David Cameron began an experiment that he knew might not succeed. He created a new office, the Behavioural Insights Team, which would try to apply new understandings of human behavior to the work of agencies throughout government -- with the goal of saving 10 times as much money as the project cost. If BIT failed, it would be shut down within two years. (Disclosure: I have consulted with BIT on occasion, and the office itself now plans to work with Bloomberg Philanthropies on a project involving midsize U.S. cities.)
Many people were skeptical about the idea. It seemed like a potential waste of taxpayers' money on a new research institute, and, to some, the very notion of using "behavioral insights" seemed vague and somewhat scary. Who wants government to be manipulating people's behavior?
In five years, however, BIT has silenced the skeptics. A new summary of its work from 2013 to 2015 shows it has, among other things, increased tax payment rates, reduced mobile phone theft, improved smoking cessation programs, bolstered cybersecurity and significantly expanded purchases of energy-efficient products.
Having conducted more than 150 randomized controlled trials, BIT is helping to improve a dazzling variety of policies -- and has inspired the creation of similar offices in the U.S., Germany, Finland, the Netherlands and other countries.
Some of its apparently small reforms have had big effects. To encourage people to sign up to become organ donors, BIT conducted a series of tests to see which message would work best. Would it be better, for example, to emphasize the number of lives that could be saved with more donors, or the number of lives that could be lost without them, or to try something else? The most influential message, it turned out, enlists reciprocity: "If you needed an organ transplant, would you have one?" It adds: "Please help others." The result: 100,000 more registrants per year.
The British government also wanted to increase the diversity of its police force, but had found that minority applicants often dropped out right before a specific stage in the process -- when applicants are asked to take a test to assess their ability to make judgments in complex situations. BIT rewrote the reminder e-mail that applicants receive before they take the test, asking candidates to think about "what becoming a police officer would mean to them and their community." The result has been an increase in the pass rate of minority applicants from 40 percent to 60 percent -- eliminating the gap with non-minority applicants.
To increase tax compliance, BIT found that people are more likely to pay up if they are informed (truthfully) that they are in a small minority of delinquent taxpayers in their community. In just one year, the gain amounted to 210 million pounds (about $325 million).
Many of BIT's initiatives have been organized around a simple framework defined by the acronym EAST: easy, attractive, social and timely. Of these, the most important is the first. When officials made it somewhat easier for consumers to switch to lower-cost energy providers, or for small businesses to sign up for beneficial government programs, the number who did so increased substantially. Timely reminders help, too; e-mails to people who had expressed interest in joining the Army Reserve nearly doubled actual application rates.
Meanwhile, those early concerns about behavioral manipulation have proved to be widely overblown. No one minds officials' simplifying forms and applications, or reminding people of good opportunities.
Many other countries can make similarly effective, low-cost reforms. With respect to childhood (and adult) obesity, for example, the U.S. has finally started to make significant progress, partly by increasing public awareness of the problem and otherwise using behaviorally informed approaches.
Amazingly, the U.S. now imposes on its citizens and businesses some 9 billion hours of paperwork a year. That burden undermines important programs designed to promote education and job training, to decrease poverty, to cut crime and to benefit startups and small businesses.
Aggressive efforts to cut red tape and simplify people's interactions with government would save money, free up people's time and make existing programs more effective. Behavioral insights can make a major difference, the U.K. has shown, and even BIT has only started to scratch the surface. For countries rich and poor, pervasive use of those insights would pay large dividends.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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