How can France and the UK help citizens make better choices?

1. How can France and the UK help citizens make better choices? Report of a seminar held at No. 10 Downing Street on17th November 2010

2. Participants Professor Paul Dolan Department of Social Policy, LSE Roisin Donachie Senior Advisor, Behavioural Insights Team Dr. David Halpern Director of the Behavioural Insights Team, Cabinet Office Ann Kenrick Secretary-General FBC Professor Alan Kirman Professor Emeritus at Université Paul Cézanne, Aix-en- Provence, Director of Studies at EHESS Sylvain Lemoine Head of the Department of Social Affairs, Centre for Strategic Analysis of the Prime Minister of France Sir Gus O’Donnell Secretary of the Cabinet and Head of the Home Civil Service Professor Olivier Oullier Associate Professor of Neuroscience at the Université de Provence and CNRS, Aix-Marseille Université, adviser to the Centre for Strategic Analysis Adam Preston Events and Publications Manager, FBC Rt Hon Baroness Joyce Quin Chair, FBC British Section Rohan Silva Senior Policy Adviser to the PM Rory Sutherland Vice Chairman, Ogilvy Group UK

3. Background • Instigated by Rohan Silva of the No10 Policy Unit following consultation with the Centre for Strategic Analysis of the Prime Minister of France. • The idea was to bring together experts on Behavioural Economics from France and the UK and seek cross fertilization and generation of concrete proposals through open discussion • Look at practical applications for the science of Behavioural Economics in France and the UK in the light of the economic crisis

4. Ethical considerations Is it government’s job to try and compensate for people’s short sightedness or irrationality? • Behavioural economics can be a powerful tool for improving lives when used with care • We already spend millions on behaviour change interventions, but they are not based on the germane insights from behavioural economics theory • We need to be transparent about the approach, to avoid the accusation that we are hoodwinking people into doing something that they may not want to • Concentrate on areas where there is the potential to demonstrably improve quality of life – for example energy efficiency and personal debt

5. Behavioural insights in UK policy context: why now? • UK government is seeking to understand how to implement the ideas behind behavioural insights in a practical way • Want to make public policy that goes with the grain of people’s actual behaviour • Working with the private sector and third parties to achieve policy outcomes • Underpinned by a belief in liberal paternalism: people need to be in control and able to choose what they want to do, but government can help with framing of choices

6. Ongoing work in France • How to mix France’s tradition of making rules with behavioural sciences in public policy • The Centre for Strategic Analysis is so far the only governmental institution to conduct prospective work on this topic • Current areas of interest are public health prevention, ecological behaviour, economics and finance, education • A particular area of work is how to transfer local interventions to every stage of public policy making (design, implementation, and evaluation)

7. Bounded rationality and choice • Participants discussed what rationality means and where nudge and better choice architecture could be applied based on what we know about bounded rationality • We know that people make lots of irrational decisions on a daily basis e.g. when presented with two loan options people are more likely to buy one marketed by an attractive woman, even if it has less favourable conditions attached • Herd behaviour is the norm • Axioms guide our behaviour • We ‘go with the flow’ of pre-set options • People are inclined to rely on rules and follow a set of defaults • Individuals regularly accept whatever the default setting is, even if it has significant consequences • Many public policy choices have a no-action default imposed when an individual fails to make a decision. Implications for France and the UK There is a need for a more substantive, realistic and standardised account of what it means to be a rational agent, from which we develop public policy based on behavioural insights

8. Public Health and behavioural insights • People’s behaviour on health is full of paradoxes – a surprisingly high number of doctors are smokers • In France and the UK we tend to legislate first and then proceed with informing people on how to make the right choices. Need to re-think general approach to avoid repeating these mistakes • With the right information we might make better choices but this is not a given. Many current assumptions are erroneous. For example people only respond to calorie labelling if they are already dieting

9. Nudge ideas and public health policy Obesity Driven by the decrease in the price and time it takes to consume high calorie food, but intervention based on behavioural economics can have an impact Peer effects matter – if you have overweight friends you are also likely to be overweight. If you see evidence that one of those friends is losing weight on Facebook that might influence you to do the same The priming effects of the layout in supermarkets are critical as is the design of a trolley: One idea is to include pictures of fruit and vegetables on the bottom of the trolley basket • Smoking • Cover up cigarettes in shops, bars and nightclubs • Make cigarette packaging plain • Cash incentives to give up coupled with commitment devices to give up

10. Transparency • Transparency generates more information, but we know that individuals have difficulty processing lots of information in such a way as to enable them to make beneficial choices. • We do know which bits of information are more salient than others and can tailor our interventions accordingly

11. Messengers • Children can be effective messengers. In areas like health they can have a positive impact on parents and grandparents • Using the wrong messenger can have negative, unintended consequences: teen mums who spoke to children about the reality of being a single mother actually made this look like an attractive option We are heavily influenced by who communicates information The perceived authority and expertise of the messenger matter Peers also matter: having a peer endorse certain positive behaviours can have a powerful impact in some areas

12. Conclusions for the UK and France • Embedding some of the principles from behavioural insights into the public policy process is not easy • Challenge is how to get ideas through the government machine; MPs in both countries tend to think of legislation as the default • Attitudinal norms need to precede behaviour change; need to consider the sequencing of behavioural interventions • A lot of this agenda can be trialled at local level, where flaws can be ironed out, results measured, and positive outcomes developed for a nationwide rollout • Interventions in this area are relatively cheap. You can try lots of things then concentrate resources in the areas that are proven to have worked