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By Eugenia Kalantzis and Dr. Damian O’Keefe

Context.  There is a growing trend in governments around the world towards demonstrating effectiveness, improving services, and saving money. This is coupled with an increased focus on the use of data and evidence to govern effectively and responsibly.  An area that has generated significant interest over the past decade in government is the application of behavioural economics approaches to influence behaviours, and consequently increases the effectiveness of policies, programs, and operations.

Initiatives based on behavioural economics have been appearing throughout governments since the publication in 2008 of the book Nudge: Improving Decision about Health, Wealth and Happiness, by Richard Thaler and Cass Sunstein.  An early application began in 2010 in the UK Government when Prime Minister David Cameron created the Behavioural Insights Team, later known as the Nudge Unit.  Headed by psychologist Dr. David Halpern, this team implemented relatively simple, low cost interventions that influenced behaviours towards the collective good.  Since that time, behavioural economics units have emerged in the US, Canada, and in allied nations, as well as in transnational organizations such as the European Commission, World Bank, and the Organisation for Economic Co-operation and Development (OECD, 2015).  In Canada, the Privy Council Office Impact and Innovation Unit (IIU; formerly, Innovation Hub) has been supporting federal departments and agencies such as Health Canada, the Canada Revenue Agency, and the Canadian Armed Forces (CAF) in exploring behavioural economics techniques since 2015.  Significant efforts have been applied at the provincial and municipal levels as well.

What are behavioural insights?  The field of behavioural economics emerged from the union of the fields of economics and psychology.  The origin of behavioural economics stems from a need to address inadequacies of classic economics theories and models employed to predict behaviour (Stonefish et al, 2017).  Classic economic theories assume that people choose to act in ways that will maximize outputs that are in their best interest—whether these interests relate to finances, health, esteem, social good, or other.  Indeed, classic economics models attempt to predict how people should behave, but they are not always successful in predicting how people actually do behave. Behavioural economics employs knowledge from the social and behavioural sciences to understand why people behave the way that they do, particularly when this behaviour is not always in their best interest. What we learn from applying behavioural economics theories are generally referred to as behavioural insights.

One important tool used in behavioural insights is the ‘nudge’. Nudges go beyond understanding and predicting behaviour; rather, they employ behavioural insights to shape behaviour.  Definitions of ‘nudges’ vary, but common to most is that they are low-cost, subtle interventions that increase the likelihood that a person will select particular options (or engage in certain behaviours) that are in their best interest—and they do so without forbidding any option or significantly changing economic incentives (Halpern, 2015).   Instead, nudges focus on simplifying decision-making processes and eliminating systemic barriers which compromise decision-making; this is done, for example, by simplifying information, changing how options are presented or framed, providing normative information, and engaging in personalized communications (Stonefish et al, 2017).

In addition to being low cost and minimally intrusive, the design of nudges is based on evidence and requires close collaboration between researchers, practitioners and policy-makers. This close collaboration stimulates innovation, and encourages individuals to question long-standing processes or long-held beliefs.  Further, the implementation of nudges promotes a culture of experimentation among stakeholders, and accelerates the rate of integration of interventions into policies and programs. Building on concepts of fail-fast, rapid-prototyping, and iterative design, interventions can be trialed more quickly, and lessons can be rapidly integrated and interventions adjusted.

Commonly cited critiques of nudges centre around ethical considerations, legitimacy and various dimensions of effectiveness.  Indeed, nudges have been described as deceptive, manipulative, lacking transparency, and paternalistic (Evans, 2012), and some have questioned the effectiveness of nudges above and beyond other governance mechanisms.  For example, although Halpern reports that one or two in every 10 interventions fail (Halpern, 2015), it is still unclear if these interventions worked better than would other governance interventions (Kosters and Van der Heijden, 2015).  Other outstanding questions are whether nudges result in lasting change in behaviour, or if effects are limited to short-term change (Curry, 2013); and whether nudges can be generalized from one group or situation to another.

Notwithstanding these challenges, the use of nudges is becoming ubiquitous amongst Canadian federal and provincial governments. Like other performance improvement techniques, at their heart, they encourage us to reflect carefully on the near and long term impact of our policies and processes, to be mindful of the motivations and interests of various stakeholders, and to employ evidence in decision-making processes—actions that inevitably result in more streamlined processes, increased awareness and buy-in by stakeholders, and ultimately more effective implementation of policies.

Behavioural Insights in the CAF.  In light of the successes of behavioural insights initiatives by governmental agencies at the national and international level, the Commander of Military Personnel Command recently stood-up the Personnel Research in Action Team (PRiA), whose mandate is to employ behavioural insights to influence positive behaviour change in support of CAF priorities.

In line with Strong, Secure, Engaged and Military Personnel Command priorities, to start, the focus of the team is to support Canadian Forces Recruiting Group (CFRG) in strengthening the CAF recruitment process.  Specifically, through experimentation and the application of nudges, the aim is to reduce the CAF recruitment processing time, to increase the likelihood that applicants will remain engaged in the recruitment process, to decrease test anxiety, to increase diversity, and to encourage applicants to consider at-risk CAF occupations.  A second priority of the team is to support the Directorate of Fitness (D Fit) in promoting the implementation of the recently released CAF Health and Fitness Strategy, including designing and implementing nudges to address the four pillars of physical performance, i.e., physical activity, nutrition, sleep/rest, and injury prevention.

The establishment of a CAF behavioural insights team signals an interest to move from traditional control mechanisms, such as banning certain options, punishment, regulations, or even financial incentives, towards behaviourally-informed interventions to change an individual’s choice architecture, thus increasing the chances of successful policy implementation and behaviour change at the grassroots level.

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References

Curry, B. (2013). Canada studies Britain’s ‘nudge unit’ for ways to give the public a push. Globe and Mail (online). https://www.theglobeandmail.com/news/politics/canada-studies-britains-nudge-unit-for-lessons-in-public-persuasion/article13541716/

Evans, N. (2012). A ‘nudge” in the wrong direction. Institute of Public Affairs Review: A Quarterly Review of Politics and Public Affairs.  64(4): 16-17

Halpern, D. (2016). Inside the Nudge Unit: How Small Changes Can Make a Big Difference. Ebury Press

Kosters, M. and Van der Heijden, J. (2015). From mechanism to virtue: Evaluating Nudge theory. Evaluation. 21(3): 276-291

Mullainathan, S. and Thaler, R. H. (2015). Behavioral Economics. International Encyclopedia of the Social and Behavioral Sciences. Second Edition

OECD (2015). Behavioural insights and new approaches to policy design: The views from the field. Summary of OECD international seminar held in Paris, 23 January 2015.

Stonefish, T., McLellan, C., Bremmer, N., and Budgell, G. (2017; publication pending). Literature Review of Behavioural Insights. Human Resources Systems Group Contract Report for Director General Military Personnel Research and Analysis, Department of National Defence, Canada

Soman, D. (2015). The Last Mile: Creating Social and Economic Value from Behavioural Insights. Rotman-UTP Publishing, Canada