Delivering Better Policies Through Behavioural Insights: New Approaches

158 Pages·2019·5.989 MB·English

by  Oecd

Delivering Better Policies
Through Behavioural Insights
NEW APPROACHES
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Delivering Better Policies
Through Behavioural
Insights
NEW APPROACHES
This work is published under the responsibility of the Secretary-General of the OECD. The
opinions expressed and arguments employed herein do not necessarily reflect the official
views of OECD member countries.
This document, as well as any data and any map included herein, are without prejudice
to the status of or sovereignty over any territory, to the delimitation of international
frontiers and boundaries and to the name of any territory, city or area.
Please cite this publication as:
OECD (2019), Delivering Better Policies Through Behavioural Insights: New Approaches, OECD Publishing,
Paris.
https://doi.org/10.1787/6c9291e2-en
ISBN 978-92-64-55573-0 (print)
ISBN 978-92-64-57741-1 (pdf)
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such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in
the West Bank under the terms of international law.
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© OECD 2019
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FOREWORD  3

Foreword
Behavioural insights (BI) has greatly expanded our understanding of how the
psychological, social and cultural factors governing human behaviour affect policy
outcomes. Governments increasingly recognise the value of BI: OECD research has
mapped over 200 government units, initiatives and partnerships across the world applying
BI to public policy. As BI has become more prevalent, countries are using it to address
new and more complex policy problems.
The OECD has been at the forefront of documenting and researching the use of BI in
public policy in general and in policy fields such as consumer protection, environment,
financial education, firm behaviour, public sector integrity, obesity, regulatory policy and
taxation. This report builds on this work by tackling new problems related to individual
behaviour as well as organisational behaviour.
This work brings together four OECD Directorates – Environment; Financial and
Enterprise Affairs; Public Governance; and Science, Technology and Innovation – to test
behaviourally informed solutions to complex policy problems in the fields of energy
consumption, competition, safety and consumer protection respectively. It uses a variety
of methods, including literature reviews and modelling to expand the theoretical basis for
applying BI to policy problems. Where feasible, these solutions were tested using various
experimental methods. Research institutions and leading experts across the world also
participated in the development of this report.
The report highlights promising results in applying BI to complex policy problems as
well as areas for further research and action. For example, it discusses ways to improve
individual behaviour with regard to energy consumption, as well as an experimental
approach to examining online advertising, disclosure agreements and personalised
pricing. In terms of changing the behaviour of organisations, the report looks at ways to
deter cartels through antitrust regimes and foster a culture of safety in the energy sector.
The report also identifies some broader lessons for using BI, such as the importance of
scoping the policy problem, studying ways to change organisational behaviour,
encouraging cross-national and cross-cultural experimentation, using a variety of tools
and experimental methods and translating results so that policymakers can implement the
findings at scale. It is also important to include BI in every stage of the policy cycle to
maximise the potential impacts to policy outcomes. Behavioural practitioners and
policymakers must also adhere to ethical standards to ensure they are applying BI
responsibly.
DELIVERING BETTER POLICIES THROUGH BEHAVIOURAL INSIGHTS: NEW APPROACHES © OECD 2019
4  ACKNOWLEDGEMENTS

Acknowledgements
This report is the product of a joint effort across the Organisation for Economic
Co-operation and Development (OECD), bringing together contributions from the OECD
Directorates for Environment (ENV), Financial and Enterprise Affairs (DAF), Public
Governance (GOV), and Science, Technology and Innovation (STI). This report and the
work underlying the analysis would not have been possible without the support of the
OECD Central Priority Fund managed by the Office of the Secretary-General.
The overall report was prepared by Francesca Papa, James Drummond and Jun Nakagawa
with co-ordination and input from Filippo Cavassini and Anna Pietikainen. Work
underlying the report was led by Filippo Cavassini and Faisal Naru and received the
encouragement and support of Marcos Bonturi, Director, Irène Hors, Deputy Director,
and Nick Malyshev, Head of the Regulatory Policy Division, Public Governance
Directorate. Peer review comments to the overall report were provided by Martin Forst
and Alessandro Bellantoni, Head and Deputy Head of the Governance Reviews and
Partnership Division, and Edwin Lau, Head of the Budgeting and Public Expenditures
Division, Public Governance Directorate. Input and comments on the overall report were
provided by Walid Oueslati (ENV), Chris Pike (DAF) and Michael Donohue (STI).
Eleonore Morena edited the report and Jennifer Stein co-ordinated the editorial process,
with editorial support provided by Andrea Uhrhammer and Meral Gedik.
Each chapter was prepared and reviewed by dedicated teams whose work the Secretariat
would like to acknowledge:
 Chapter 2: Real-time information and consumer decisions on energy consumption
was prepared by Dr Nicholas Rivers, University of Ottawa, with input and
support from Elisabetta Cornago, Alexandros Dimitropoulos and Walid Oueslati,
Environment and Economy Integration Division, ENV. The work underlying the
chapter was discussed in the OECD Environmental Policy Committee in
February 2018.
 Chapter 3: Protecting digital consumers was prepared by Richard Bates, with
input and support from Anna Barker and Michael Donohue, Division for Digital
Economy Policy, STI. The work underlying the chapter was discussed in the
OECD Committee on Consumer Policy in November 2018.
 Chapter 4: Cartel deterrence and the labour market for managers was prepared
by Dr Ricardo Gonçalves, Católica Porto Business School, Dr Miguel A. Fonseca,
University of Exeter Business School, Dr Joana Pinho, Católica Porto Business
School, and Dr Giovanni Tabacco, Swansea University, with input and support
from Sean Ennis and Chris Pike, Competition Division, DAF. The work
underlying the chapter was circulated in the OECD Competition Committee in
December 2018.
DELIVERING BETTER POLICIES THROUGH BEHAVIOURAL INSIGHTS: NEW APPROACHES © OECD 2019
ACKNOWLEDGEMENTS  5

 Chapter 5: Fostering a safety culture in the energy sector was prepared by
Mary MacLennan, behavioural science consultant and former member of the
Impact and Innovation Unit, Canada, supported by Dr Tom Reader, London
School of Economics, and Dr Morgan Tear, Research Fellow, London School of
Economics and BehaviourWorks Australia at Monash University, with input and
support from Filippo Cavassini, Shelly Hsieh and Anna Pietikainen, GOV.
Comments were provided on the country analysis by Claudine Bradley,
Melissa Mathieson and Peter Watson, National Energy Board (NEB), Canada;
Ann McGarry and Ashleigh Shaheen, the Commission for Regulation of Utilities
(CRU), Ireland; Daniela Martínez Ramírez, Patricia Angelica Quiles Martinez
and Fernanda Garcia Rodriguez, Agency for Safety, Energy and Environment
(Agencia de Seguridad, Energía y Ambiente, ASEA), Mexico; and Qais Al
Zakwani, Authority for Electricity Regulation (AER), Oman. The work
underlying the chapter was discussed in the OECD Network of Economic
Regulators in November 2018.
DELIVERING BETTER POLICIES THROUGH BEHAVIOURAL INSIGHTS: NEW APPROACHES © OECD 2019

TABLE OF CONTENTS  7

Table of contents
Abbreviations and acronyms .............................................................................................................. 11
Executive summary ............................................................................................................................. 13
Chapter 1. Overview and key lessons ................................................................................................ 17
Behavioural insights and public policy: Where are we now .............................................................. 18
Applying behavioural insights to current policy issues: New insights .............................................. 20
Guidance and lessons for policymakers ............................................................................................. 24
References .......................................................................................................................................... 26
Part I. Individual decision-making .................................................................................................... 29
Chapter 2. Real-time information and consumer decisions on energy consumption .................... 31
Introduction ........................................................................................................................................ 32
Context and problem setting .............................................................................................................. 34
Literature review ................................................................................................................................ 36
Methodology ...................................................................................................................................... 39
Results and discussion ....................................................................................................................... 41
Conclusion ......................................................................................................................................... 44
Notes .................................................................................................................................................. 44
References .......................................................................................................................................... 46
Chapter 3. Protecting digital consumers ........................................................................................... 49
Introduction ........................................................................................................................................ 50
Context and problem setting .............................................................................................................. 52
Methodology ...................................................................................................................................... 64
Conclusion ......................................................................................................................................... 66
Notes .................................................................................................................................................. 66
References .......................................................................................................................................... 67
Part II. Organisational decision-making ........................................................................................... 71
Chapter 4. Cartel deterrence and the labour market for managers ............................................... 73
Introduction ........................................................................................................................................ 74
Context and problem-setting .............................................................................................................. 77
Methodology ...................................................................................................................................... 86
Results and discussion ....................................................................................................................... 95
Conclusion ....................................................................................................................................... 110
Notes ................................................................................................................................................ 111
References ........................................................................................................................................ 112

DELIVERING BETTER POLICIES THROUGH BEHAVIOURAL INSIGHTS: NEW APPROACHES © OECD 2019
8  TABLE OF CONTENTS

Chapter 5. Fostering a safety culture in the energy sector ............................................................ 117
Introduction ...................................................................................................................................... 118
Context and problem setting ............................................................................................................ 119
Methodology .................................................................................................................................... 125
Results and discussion ..................................................................................................................... 129
Conclusions ...................................................................................................................................... 139
References ........................................................................................................................................ 140
Annex 5.A. Additional information and sample survey .................................................................. 145

Tables
Table 4.1. Summary of hypotheses ....................................................................................................... 95
Table 4.2. Determinants of cartel formation coefficient and statistical significance (standard errors) . 99
Table 4.3. Determinants of individual and aggregate votes for cartel formation coefficient and
statistical significance (standard errors) ...................................................................................... 100
Table 4.4. Estimates on the propensity of managers to co-ordinate on the same price when a cartel
is active ........................................................................................................................................ 102
Table 4.5. Estimates of the determinants of selling price .................................................................... 104
Table 4.6. Relative frequency (%) of self-reported motives for contract choice NoChat ................... 106

Annex Table 5.A.1. Additional information on regulators by country ............................................... 145
Annex Table 5.A.2. Canada National Energy Board .......................................................................... 147
Annex Table 5.A.3. Mexico: Agency for Safety, Energy and Environment (ASEA) ......................... 147
Annex Table 5.A.4. Ireland: Commission for Regulation of Utilities ................................................. 148
Annex Table 5.A.5. Behavioural vignette items ................................................................................. 153
Annex Table 5.A.6. Sample behavioural vignette ............................................................................... 154

Figures
Figure 4.1. Cartel formation frequency conditional on treatment and contract type ............................. 98
Figure 4.2. Distribution of votes in favour of forming a cartel ........................................................... 100
Figure 4.3. Proportion of cases in which cartels were active and firms co-ordinated on prices.......... 101
Figure 4.4. Average selling prices conditional on contract type and a cartel being active .................. 103
Figure 4.5. Proportion of low-powered contracts offered ................................................................... 105
Figure 5.1. National differences in safety culture perception .............................................................. 131
Figure 5.2. Role differences in safety culture perception .................................................................... 132
Figure 5.3. Comparing behavioural principles .................................................................................... 133
Figure 5.4. Messenger effects .............................................................................................................. 134
Figure 5.5. Occupational response to the messenger effect ................................................................ 136
Figure 5.6. Regulator vs. entity responses to messenger vignettes ..................................................... 137

DELIVERING BETTER POLICIES THROUGH BEHAVIOURAL INSIGHTS: NEW APPROACHES © OECD 2019