Showing posts with label Behaviour Economics. Show all posts
Showing posts with label Behaviour Economics. Show all posts

Monday, June 01, 2015

Behavioural Insights in International Development

This is a guest post by Tom Wein.

International development seems a natural home for behavioural science, but how much progress has been made in integrating the two? Which challenges have been solved, and which remain?

The World Bank’s much-discussed ‘Mind, Society and Behaviour’ report is almost six months old, and co-author Varun Gauri came to the RSA to discuss progress so far. (You can watch the event video here). The integration project is, he argued, proceeding apace, and up to a point he is right. This post, sparked by Gauri’s talk but supplemented by further research and conversations, summarises the work done so far in creating behavioural science structures and alliances in development, before offering a personal view of the problems we still face in putting the two disciplines to work.

In terms of structures, the World Bank has so far been working with the Behavioral Insights Team, but will soon launch its own Behavioral Innovations Lab. There are also plans for staff training courses, and Gauri expressed his hope that behavioural science workshops would be integrated into the planning stage of all new World Bank projects.

Though Gauri talked mainly about the Bank, other donor organisations have made moves in similar directions, even if none have gone quite as far. DFID’s Chief Economist Stefan Dercon has been part of some interesting work at the intersection between development economics and psychology, though the wider organization has so far held back in this field. In 2013, USAID co-sponsored with UNICEF a summit on the evidence for behaviour change; the Agency has also funded a number of behavioural science-inflected change programmes.

Now outside government, the Behavioural Insights Team – the original ‘nudge unit’ – has also launched projects with UNDP, and with the governments of Mexico, Costa Rica, Guatemala and Peru. MIT’s Abdul Latif Jameel Poverty Action Lab, the Busara Center for Behavioral Economics in Nairobi, Cameroon’s IRESCO, and the Innovations for Poverty Action research programme have all sought to draw on psychology to explain behaviour and improve policy in developing countries. More directly employing behavioural science in development projects, rather than merely advising, is the NGO Evidence Action. At the biggest non-governmental donor of them all, Melinda Gates has spoken of her personal enthusiasm for behavioural science, and the foundation has funded Grand Challenges on changing health behaviours. There are ambitions to apply psychology to improve child nutrition, and to boost sanitation. For those trying to learn more, UCL’s Centre for Behaviour Change and Harvard Business School both offer training on the intersection between behavioural science, development and health.

So, in my opinion, there is some good work going on, and a mounting number of behavioural science studies have been conducted in developing countries (many of their results were mentioned by Gauri in his talk). It helps of course that development bodies have already acquired the habit, over the past decade, of conducting empirical research and reasonably rigorous evaluation; in that regard development policymaking was already more advanced than much domestic, national decision-making.

Though Gauri and others are right to be positive about the movement so far, some important challenges remain. Most significantly, the replication of some findings has not abolished the problem of applying WEIRD results to very different contexts; groups differ widely, and cross-cultural perspectives are still vital. Though knowledge of the particularities of conducting research in resource-constrained environments is spreading, we still lack a full understanding of the adjustments necessary and their implications for interpreting results. There is also, of course, much we still simply don’t know. As Gauri cautions, this is a discipline of incremental advances and diligent empiricism, not grand explanatory theories.

There has been one notable absence from the talk, and from the wider debate. Behavioral science’s temptation towards ‘we know best’ manipulation has been queried in virtually every context in which it has been applied. Yet not, Gauri said, at the World Bank. Skeptics would note that development economics has faced very similar criticisms, often accused of sidelining local voices in favour of intellectually arrogant technocracy. Given that development often deals – by definition – with the marginalized and disempowered, there is an even stronger duty than elsewhere to ensure that behavioural science interventions are implemented with the consent and cooperation of the participants.

Finally, what can behavioural science do to ensure that it is fit for purpose in developing countries? I believe its standard bearers can better engage with existing debates about behaviour in development, including the use of Theories of Change and efforts to leverage the power of communities. As a discipline, it can emphasize parsimony, both in its research questionnaires and in its models. For the latter work, the UCL team’s Behaviour Change Wheel deserves particular acclaim; 'Capabilities, Opportunities and Motivations' is accessible enough to be jotted down on the back of an envelope – even in an ancient Toyota on awful dirt roads. Behavioural scientists must recognise that development professionals have long been trying to change behaviour, and that behavioural science is there to improve and supplement, not replace. Above all, they can continue to ensure that behavioural science remains a discipline that seeks not just to understand but to respond; methods and models must have the clearest possible link from data to specific, actionable recommendations, because development does not need more vague advice from learned thinkers.

Development is ill-defined and contested; some would do away with the concept altogether. Behavioural science has experienced some of the same tribulations. The marriage between these two mongrel disciplines will only work if it focuses on ‘what works’, and is relentlessly pragmatic in delivering results.


Tom Wein is the founding partner of Aware International, a social enterprise offering behaviour insight and ground insight services for the public good. A behavioural science consultant and writer, he works mostly on conflict and development. He tweets @tom_wein and his writing is collected at tomwein.tumblr.com.


Thursday, July 15, 2010

Is behavioural economics oversold?

George Loewenstein and Peter Ubel argue that "Behavioral economics should complement, not substitute for, more substantive economic interventions. If traditional economics suggests that we should have a larger price difference between sugar-free and sugared drinks, behavioral economics could suggest whether consumers would respond better to a subsidy on unsweetened drinks or a tax on sugary drinks.
But that’s the most it can do. For all of its insights, behavioral economics alone is not a viable alternative to the kinds of far-reaching policies we need to tackle our nation’s challenges."

Sunday, June 21, 2009

Why economists failed to predict the financial crisis

Thia is a nice piece, via the excellent Arts & Science Daily (http://www.aldaily.com/), on why economists messed up in not forseeing the current crisis:
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2234.
Behavioural explanations get a mention.

Thursday, October 30, 2008

Reminder: Economics and Psychology Conference Maynooth

A one-day conference on Economics and Psychology will take place in NUIM on November 7th. The purpose of this event is to provide a forum for the discussion of work at the interface of economics, psychology and cognate disciplines such as neuroscience. The event is co-organized by the Department of Economics, Finance and Accounting in Maynooth and the UCD Geary Institute. The International Association for Research in Economic Psychology (IAREP) is the relevant international body and we would encourage attendees to consider joining this group. All are welcome and there is no registration fee. Please contact Liam Delaney ( Liam.Delaney@ucd.ie) to confirm attendance. The event will take place in the Physics Hall in Maynooth, which is on the South Campus. The Physics Theatre is number 8 on the map provided below.

http://www.nuim.ie/location/maps/south.shtml

Further details are available below

http://geary.ucd.ie/behaviour/index.php/Home/One-Day-Symposium.html

Sunday, August 17, 2008

NBER Paper on Evolution and Time Preferences

From the NBER site.

http://papers.nber.org/papers/w14185

The Evolutionary Theory of Time Preferences and Intergenerational Transfers

At each age an organism produces energy by foraging and allocates this energy among reproduction, survival, growth, and intergenerational transfers. We characterize the optimal set of allocation decisions that maximizes reproductive fitness. Time preference (the discount rate) is derived from the marginal rate of substitution between energy obtained at two different times or ages in an individual’s life, holding reproductive fitness constant. We show that the life history may have an initial immature phase during which there is body growth but no fertility, and a later mature phase with fertility but no growth, as with humans. During the immature phase, time preference depends only on the compounding effect of body growth, much like returns on a capital investment, but not on fertility, or the intrinsic population growth rate. During the mature phase, time preference depends on the costliness of fertility, and on endogenous survival and intrinsic growth rate, and not at all on body growth. During the transition between the two phases, fertility, mortality, body growth, and intrinsic growth rate all matter. Using these results, we conclude that time preference and discount rates are likely to be U-shaped across age. We compare our results to Hansson and Stuart (1990), Rogers (1994, 1997) and Sozou and Seymour (2003). Wastage and inefficiencies aside, in a single sex model a system of intergenerational transfers yields Samuelson’s (1958) biological interest rate equal to the population growth rate. When the rate of time preference exceeds this biological rate, inter- generational transfers will raise fitness and evolve through natural selection, partially smoothing out the age variations in time preference.