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Overview
1. Economics and Public Policy2. Inter-disciplinarity3. Behavioural Science4. Examples and Applications 5. Irish Public Policy
"In reflecting on any action, which I am to perform a twelve-month hence, I always resolve to prefer the greater good, whether at that time it will be more contiguous or remote; nor does any difference in that particular make a difference in my present intentions and resolutions. My distance from the final determination makes all those minute differences vanish, nor am I affected by any thing, but the general and more discernible qualities of good and evil. But on my nearer approach, those circumstances, which I at first over-looked, begin to appear, and have an influence on my conduct and affections. A new inclination to the present good springs up, and makes it difficult for me to adhere inflexibly to my first purpose and resolution. This natural infirmity I may very much regret, and I may endeavour, by all possible means, to free my self from it. I may have recourse to study and reflection within myself; to the advice of friends; to frequent meditation, and repeated resolution: And having experienced how ineffectual all these are, I may embrace with pleasure any other expedient, by which I may impose a restraint upon myself, and guard against this weakness."
Economics and Public Policy
• Scottish Enlightenment• Pareto Turn in Economics• Samuelson and Friedman• Econometrics Society• Economists as gatekeeper of knowledge in
public policy
Interdisciplinarity and Public Policy
• Complexity of many issues• Measurement Paradigms• Team-based Science• Motivation: Efficiency, Stability, Necessity,
Reciprocity. (Ankrah & AL-Tabbaa, 2015)
Challenges of Interdisciplinarity
• Assessing quality across fields• Beer-mat inter-disciplinarity
• “Beer-mat knowledge” Vs. Interactional/Contributory Expertise
• Incentive problems• Meaningful contributions Vs. Re-labelling
• Career structures• Collaboration framework
• Boardman and Corley (2008) : estimates of researcher time-use
Behavioural Science and Public Policy
• 20th century challenges• Herbert Simon • Kahneman/Thaler/Sunstein• Libertarian Paternalism• Behavioural Science and Law
Economics can’t afford to overlook the role of emotions in decision making: pain, pleasure, arousal,
hunger, thirst, anger, hatred, contempt, pity, etc...
“Animal Spirits”
To understand how economies work and how we can manage them and prosper, we must pay attention to the
thought patterns that animate people’s feelings and ideas, their animal spirits”. We will never really understand
important economic events unless we confront the fact that their causes are largely mental in nature
Akerlof and Shiller
10
Behaviourally Informed Regulation
Measurement and Evaluation
• Naturalistic Monitoring• Comparison of Lab and
Field Experiments • Measurement of
Consumption and Well-Being
• Eliciting Economic Preferences
Life-Cycle Economic Behaviour and Outcomes
• Self-Control and Life-long economic welfare
• Dynamic Interactions between mental health and economic outcomes
• Non-cognitive traits and economic preferences
Ethical and Legal Aspects of Behavioural Science
and Policy
• Ethics of Nudging• Dark Nudging• Implications of BE for
Regulation • Implications of BE for
development of law
UCDBSP Key Research Themes
Research
• Based in Geary Institute• Three Overlapping
Streams • Development of cohort
of PhD and Postdoc Researchers
• Wide range of seminar activities
• European Networks
Education
• UG Module• MSc in Behavioural
Economics• Exec Education• European Collabs• PhD & ECF training
Industry and Policy
• AIB Financial Decision Making Lab
• Amarach Collaboration• Carr Collaboration• IGEES & Public Policy
UCDBSP Main Branches of Activity
Example 1: Benefit Sanctions
• Economic Theory and Incentives for Job Search • Psychology of Unemployment • Importance of administrative law
considerations • Wider behavioural science of job market
activation
Benefit Sanctions: Overview
• Global Financial Crisis• Implementation of Austerity Policies• High Focus on Working Age Benefit Policies• Job Seekers Allowance • Employment and Living Support Allowance• Issues of Effectiveness • Issues of Administrative Justice• Mental Health Effects
Benefit Sanctions: Literature to Date
• Qualitative accounts of process problems with implementation of sanctions• Economic literature on partial success of moderate
sanctions in high growth economies e.g. Blundell et al late 1990s• Webster quantification of scale of sanctions• Loopstra, Reeves, and others association with
foodbank use
Benefit Sanctions: Research Agenda
• What is the source of the sharp spatial and temporal distinctions in benefit sanctions? • Are benefit sanctions at local level related to
psychological distress among those claiming working age benefits?• Did they lead causally to different employment outcomes? • How to design job activation systems that empower
employment search without causing serious harm
Example 2: Pension Auto-enrolment
• Life-Cycle Consumption Model faces many challenges• Under-saving and under-annuitisation • Low elasticities to taxation incentives • High impact of changes in default structure • Wider behavioural science of economic
behaviour
Auto-enrolment: Active Market Structuring
Benartzi & Thaler (2004), Save More Tomorrow, Journal of Political Economy
Auto-enrolment: Encouraging Pension Saving
No Default Default 0.8 Default 4 Default 80.00
5.00
10.00
15.00
20.00
25.00
Optimal and experimental saving rates
Optimal saving rate Experimental saving rate23
Auto-enrolment: Defaults as Recommendations
Models for Irish Public Policy• SFI Center for Behavioural Science
• US: NSF approach to interdisciplinarity and Behavioural Sciences
• Govt and Regulatory Insights Teams• U.K. Behavioural Insights Team
• National PhD (Sphere)• Dublin Industry and Regulatory cluster
• “regional ecosystems of related industries and competences featuring a broad array of inter- industry interdependencies” (EU Cluster Policy)
• University Policy Research Institutes • The role of the Whitaker and Geary Institutes
University Policy Research Institutes
• Foster collaboration: • Forums for rapid feedback
• Holding pens for inter/transdisciplinary work• Interdisciplinary education and professional
development:• Internships/Masterclasses/Summer Schools
• Further develop transdisciplinary approach:• Residencies from policy
Back to Hume
• Grounded economic science• Empirical not dogmatic• Blurring edges between disciplines • Behavioural Science and Public Policy
• “We often act knowingly against their interest”
“The challenge to us all is to perfect both our methods of appraising what needs to
be done and our democratic procedures for achieving our national aims.”
Dr. T.K. Whitaker
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