Synopses & Reviews
Synopsis
This book brings together a set of experiences from Central American countries. In each case, behavioral insights are applied to different areas of public policy, in some cases trough randomized control trials (RCTs) and in other using surveys or behavioral games. These experiences collectively show the promise of public policies that are informed by a better understanding of what drives the behavior of individuals. For example, in Costa Rica, informing households of how much water they consume vis-a-vis their neighbors reduced water consumption by nearly 5 percent per month, on average (Chapter 1); in Guatemala, altering the way government communicates with taxpayers increased revenue collection by a third (Chapter 2). In Nicaragua, an analysis of the cash transfer program Atencion a Crisis found that children in households assigned to receive benefits had significantly higher levels of cognitive development nine months after the program began. This result was influenced by the parents' behavior change which emerged in response to non-monetary factors such as increased social interactions and motivation (Chapter 3). In El Salvador, the launch of a gas subsidy reform provided the context in which we investigated people's perceptions of the reform, revealing that the level of satisfaction with the reform could have been raised by actions to increase the information provided to individuals (Chapter 4). Finally, chapter 5 also uses behavioral insights to analyze subsidy reforms in El Salvador, with a different methodology. It describes a set of economic behavioral games designed to evaluate the willingness with which high-income householders would accept subsidy reforms that affected them directly. Results suggest that the majority of the well-off are prepared to see their electricity and water subsidies reduced on the condition that the economic gains of these reductions were used for poverty reduction projects or for the delivery of public goods. These cases illustrate some of the findings of the 2015 World Development Report (WDR) "Mind, Society and Behavior" in practice, and the possibility of using non-traditional tools, complementary to regulation, in a context where time and resources are limited. We hope these experiences will help to inform other practitioners about the potential of applying behavioral insights in a development context and encourage them to consider such approaches as a complement to traditional policy measures.
Synopsis
Behavioral Insights for Development: Cases from Central America brings together a set of experiences that applied behavioral insights to different areas of public policy--in some cases through randomized control trials, and in others using surveys or behavioral games. These experiences collectively show the promise of public policies that are informed by a better understanding of what drives individual behavior. In Costa Rica, for example, informing households of how much water they consume relative to their neighbors reduced water consumption (chapter 1). In Guatemala, altering the way government communicates with taxpayers increased revenue collection (chapter 2). In Nicaragua, an analysis of a cash transfer program found that children in households receiving benefits exhibited significantly higher cognitive development--a result influenced by parental behavior changes during the program (chapter 3). In El Salvador, we explore how different biases explain the apparent puzzle of a gas subsidy reform that benefited most of the population yet proved to be widely unpopular (chapter 4). Chapter 5 also uses behavioral insights to analyze subsidy reforms in El Salvador, this time using a different methodology: a set of economic behavioral games designed to evaluate the willingness of individuals to accept subsidy reforms that would affect them directly. Finally, chapter 6 reflects on the progress made in applying behavioral insights in a development context. These cases illustrate, in practice, some of the findings of the World Development Report 2015: Mind, Society, and Behavior. In particular, they demonstrate the possibility of using nontraditional tools, complementary to regulation, in contexts where time and resources are limited. The World Bank has since established a Mind, Behavior, and Development (eMBeD) Unit within the Poverty and Equity Global Practice to mainstream and scale up behavioral science in public policies and programs. We hope these experiences will help to inform other practitioners about the potential of applying behavioral insights in a development context and will encourage them to consider such approaches as a complement to traditional policy measures.