Thursday, 15 October 2015

Behavioural insight as a weapon

I've blogged on an off over the years about behavioural economics and what lefties can usefully learn from it. It seems like the surge of interest on the Left in the UK in this area has subsided a bit compared to a few years back. But I'm sure the same is not true of the Tories. The Behavioural Insights Team (or 'Nudge unit') is now a company arm's length from government, but is still beavering away on all kinds of topics.

They popped into my head today when I was thinking about the Trade Union Bill. From a behavioural perspective a lot of elements of this Bill seem to do the wrong thing in terms of engaged membership. For example, take the remove of Deduction of Contributions at Source (DOCAS). This removes the ability of potential union members to have subs deducted via payroll, and will require unions to sign them up individually by direct debit.

This is the opposite of what the Behavioural Insights Team advises in other areas. For example, in this 2013 paper on increasing charitable giving (which can still be done via payroll deduction!) they say: "One of the most important lessons from the behavioural science literature is that if you want to encourage someone to do something, you should make it as easy as possible for them to do so."

Getting rid of DOCAS makes it more difficult for employees to pay union subs. So we might reverse the message and say: if you want to discourage someone from doing something you should make it as difficult as possible. Seen in this way, the DOCAS proposal makes a lot of sense - if behavioural science is being applied with the objective of discouraging employees from joining unions.

Or look at the proposal on the political levy. Here the shift is from an opt-out to an opt-in model, with the added requirement that members are required to opt in again after five years. In behavioural terms this is changing the 'default'. Again, it's useful to quote the Behavioural Insights Team itself. The text below comes from the doc "Four Simple Ways to Apply Behavioural Insights" (my emphasis added):

1.1 Harnessing the power of defaults
We have a strong tendency to stick with the ‘default’ option, which is the outcome that occurs if we do not choose otherwise. Understanding the default and how it can be changed can significantly improve uptake of a service.
Some of the most famous policy examples from the behavioural economics literature relate to changing the default option. For example, when individuals are automatically enrolled onto pension schemes but can choose to opt out, they are much more likely to end up with a pension plan than if they have to actively opt in (see Box 1.1).
Similarly, organ donation schemes can be set to automatically enrol people. Or tax systems can be put in place that automatically deduct individual’s income tax without an individual having to take any action (as in the UK’s Pay-As-You-Earn system). In these examples the default option can be a very powerful tool for encouraging different outcomes. But because of the power of these particular policy tools, they will also require careful consideration of what might be acceptable politically and to the public at large.
If we look at what is proposed in relation to the political levy we might look at this line in particular:  Understanding the default and how it can be changed can significantly improve uptake of a service.

Currently the political levy default is opt-out, encouraging members to stay in (but having the option to leave). But it is being shifted to opt-in which will encourage members to stay out. What's more the added requirement of a 5 year re-approval of your own decision if you do opt in adds another encouragement for members not to participate.

Once again we see that the policy makes sense - if we reverse the objective. The Tories want less take-up, not more. I think they do indeed understand that the default is a very powerful tool, and they are using this knowledge by changing the default (to opt-in) in order to significantly reduce the take-up of paying the political levy. To use the Behavioural Insights Team example of pensions, if this approach was applied by a pension scheme - you have to actively join, and have to choose again after 5 years - we would assume the sponsor didn't want people in it.

To me it's pretty obvious the Government knows exactly what it is doing with theses interventions - making it harder for employees to join unions, and making it harder for them to pay the political levy. What is significant is that these policies are well-designed from a behavioural perspective if the objective is to reduce union membership and weaken union political activity. What we see here, then, is behavioural science being used as a weapon by the Right against the labour movement. We need to learn a lesson here.

The only question I really have is whether the Behavioural Insights Team was consulted or advised on the Bill, and I can imagine that it wouldn't look good if it emerged that the Government was using psychological tactics to weaken unions. So I was interested to see one stray reference to "behavioural insight theory" in the BIS paper on balloting (para 79 on page 16 here).


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