The quality of a society depends largely on the quality of its governing bodies. More effective the governments and the ministries, the higher the quality of life of its residents. As such, there is an increasing focus on innovations and programs to devise creativity and changes in governing bodies, with the aim of improving the quality of their public service and duties.
However, in the process of moulding civil servants into more efficient risk takers and creative inventors, there are several challenges associated with applying behavioural economies.
How should governments utilise tools of behavioural economics?
Governments should broaden the scope beyond just research and statistics, and adopt a more wholesome approach to applying behavioural economics. In order to make the most of the challenges that one faces as policymakers, they would need to go beyond the obvious and adopt a more complex perspective.
Being change makers themselves, they should feel motivated enough to be part of the process. Giving them a sense of meaning and more growth opportunities could be an ideal nudge to steer them towards adhering to the changing policies.
Individuals in this realm and the challenges they face may be different from the general public. Any changes should be aligned with the policymaking process, which would make it easier for them to adapt and implement.
Can behavioural economics affect the policymaking process?
From the policymaking perspective, the role of behavioural economics is to introduce initial perspectives right at the time of formulation and ideation of policy issues and problems. But since society is always evolving, and the pace of the world is always changing, the ideal approach is to factor in behavioural changes in the public as well.
What are the obstacles to overcome?
Traditionally, governments have been following an evidence-based route for policymaking and decisions. With the inclusion of behavioural economics, it might be more complex for governments to handle the behavioural economics approach.
Although behavioural insights are collected based on evidence from samples, it’s based on small populations and sample sizes. Scaling up for a complex environment is not based on evidence. In that sense, governments need to be aware that the outcomes may be non-predictive, and they may have to make continuous adjustments to their policies accordingly.
This may be the biggest hurdle for policymakers – keeping track of the constant behavioural changes and tweaking policies accordingly to keep up with the public. Instead of just levying fines and imposing regulations, leaders should think in terms of leading by example and let their actions and thoughts reflect their intention of implementing policies and changes.
Government agencies can fine-tune the nuances in their policymaking process by including the following approach –
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