Tuesday, 15 April 2008

Framing and social security reform

I'm steadily getting through The New Financial Order, which is proving to be an even better read than I had expected. I've just finished a chapter with the snappy title 'The science of psychology applied to risk management', however it is really about the importance of framing when making policy. No surprise to see Kahneman and Tversky feature quite a bit. Here's a quick snippet from towards the end of the chapter:

"The inventive use of framing, as illustrated by the history of US Social Security, is not one of manipulation. Rather, it consists of setting things up right for our society, putting things in the right boxes in terms of our underlying mental structures, to guarantee the long-term stability of our arrangements. In the case of social security, the proper psychological framing done in the 1930s created a substantive claim of right that survives to this day. These aspects of the framing of insurance and social insurance have worked in the past to encourage public acceptance of some important risk management institutions. Looking to the future, we must again be inventive with framing."

I'd recommend spending 10 minutes reading this chapter to anyone involved in policy work.

It also made me think about how much damage is done when there are sharp policy reverses in respect of social insurance. Not only do we lose out financially, but our understanding of the world is radically altered too. It's one of the reasons why I think the Tories did far more damage in the 80s than they have realised. They changed the rules of the game.

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