Law, Public Policy, and Individual Behavior

02 Oct 2016

Dr. Georgios Dimitropoulos, Assistant Professor at CLPP, explores the convergence of behavioral economics and cognitive psychology that gave way to a new field of law with profound impact on public life.

CLPP

One of the main roles of the government is to influence citizens to behave according to the path laid down by institutions of the state. To do this, the government intervenes in society through various organizational forms and regulatory interventions. It may sound absurd, but until recently, government had not systematically studied how individuals and collectivities within a society really behave.

When the modern states came to existence in the 19th century, command-and-control or direct regulation was developed. This refers to commands, prohibitions, screening procedures and sanctions. The 20th century allowed for market-based instruments to enter the public policy realm. States embraced markets in to fulfill various tasks in the public interest. These two systems may sound as antithetical paradigms of regulation, but the truth is that they are much more similar than one might first think: both assume one type of behavior by the citizens—that individuals are rational and when they obey to command-and-control and are motivated by the incentive structures put in place by the state, they do so in order to maximize their self-interest. This understanding of the law and public policy is mainly due to the dominance of economics in the social sciences and public policy in the last 200 years. Economics, and consequently other social sciences and public policy, have largely adopted the rational choice paradigm of individual behavior.

At the end of the 20th century, and more intensively from the beginning of the 21stcentury, government started studying the behavior of citizens in a more systematic way. This is the result of a more fundamental change in the social sciences. Even though economics largely remain the dominant social science and have the greatest influence on public policy, psychology has had a great influence on the discipline of economics. Psychology, and more specifically its cognitive variant, has revealed that individuals are only “boundedly rational” giving rise to the new discipline of behavioral economics. The insights of behavioral economics and cognitive psychology have had a fundamental role in shaping public policies around the word during the last 15 years. What emerged is a new field of law, Behavioral Law and Economics, and new areas of public policymaking, behavioral public policy.

Behavioral Law and Economics has had an influence on state institutions, with the appearance of so called “nudge units” or “behavioral insights teams” like the UK Behavioural Insights Team (BIT) and the White House Social and Behavioral Sciences Team (SBST), and regulatory interventions, with the promulgation of so called “nudges.”Nudges, according to Richard Thaler & Cass Sunstein, are a light form of regulatory control that claim to maintain people’s freedom of choice. Nudges form part of a broader

Behavioral Law and Economics has had an influence on state institutions, with the appearance of so called “nudge units” or “behavioral insights teams” like the UK Behavioural Insights Team (BIT) and the White House Social and Behavioral Sciences Team (SBST), and regulatory interventions, with the promulgation of so called “nudges.”Nudges, according to Richard Thaler & Cass Sunstein, are a light form of regulatory control that claim to maintain people’s freedom of choice. Nudges form part of a broader category of behavioral interventions that have the purpose of “debiasing” individuals by aligning their choices more closely with their true preferences. They include default rules such as automatic enrollment in education and health programs, warnings–graphic or otherwise, the use of social norms–by emphasizing for example what most people do (especially people of the same community), and other strategies of data-driven personalization–like reminders by e-mail or text message, for example on overdue bills.

Like many other countries around the world, including the UK, US, Australia and Singapore, nudges are omnipresent in Qatar. These can range from messages on highways nudging drivers to wear seatbelts and not use their mobile phones while driving, to messages below trees that aim to reduce pollution, to the Qatar Foundation 2016 Nutrition Awareness Campaign “Color Your Plate.” They can be an extremely effective instrument or regulation, if one keeps their drawbacks in mind as well.

Dr. Georgios Dimitropoulos
Assistant Professor, CLPP