Creating awareness as a major vehicle of good policy
- Till
- Jan 13, 2018
- 2 min read
Good policy making is always challenging. Not only must different interests and viewpoints be reconciled, it is also difficult to predict whether the intended effect will be achieved.
The sugar tax for beverages is a good example. Some argue that it would help reduce obesity, diabetes and cavity problems. Others argue it would be misleading as fruit juices are also high in sugars, artificial sweeteners are as bad as sugars and that it would hit the poor disproportionally (assuming no change in behaviour).
What is therefore the best course of action?
Let’s consider the psychology behind incentives, i.e. instruments to gradually change people’s behaviour.
The book series ‘Freakonomics’ champions that it is crucial to always consider social (recognition and status), financial (gain or loss) and moral (justification or good conscience) implications of measures.
An example from the book:
Some parents picked up their kids from school too late and teachers had to take care of them in the meantime. The school decided to hand out penalties to late-coming parents. However, instead of incentivizing them to come earlier, it gave them moral justification to come even later as they are now paying for it.
A few more tangible examples:
The widespread and single use of plastic water bottles and plastic bags in supermarkets is a big problem. How to best cope with it?
Increasing the deposit paid can incentivise people to return the bottles but can also lend justification to throw them away (“some homeless person will be happy about it”). A plastic bag fee can help remind people to bring their own bags but can also serve as moral justification to keep using them.
Another question – particularly relevant in Germany – is the regulation for company cars. In general, employees pay 1% of the price of the car per month and the company pays for unlimited petrol. This clearly does not incentivise to drive less or share car rides. Again, if the 1% is adjusted depending on, say CO2 emissions per km, somebody with an SUV could now feel like it is okay to waste petrol as they are paying for it.
Unfortunately, the real cost of the environmental damage is rarely reflected in those fees or price differences.
Luckily, in all instances mentioned above, it seems that human savviness for spending has beaten the moral justification for wasteful behaviour. Plastic bag fees have indeed reduced its use, bottle deposit schemes have caused more people to either bring their own bottle or return it, and having to pay more than the 1% for company cars with high CO2 emissions has made most people pick fuel-efficient cars.
I would argue that savviness alone was not the reason. These laws in general created an awareness for the problem, people were curious to find out more, discussed it between themselves and repetitive reminding helped making better decisions.
Hence, apart from social, financial and moral incentives of laws, I would add the incentive to understand the problem at hand as well as being reminded of it constantly.
Policy-makers can ask themselves the question: ‘If everyone was aware of the problem at all times, would we see a change in behaviour?’. I believe in most instances, this can be answered with a ‘yes’ and it justifies putting a new legislation in place.
References:
Comments