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Should governments be nudging citizens to change behaviour?

LiveMint logoLiveMint 21-07-2017 Ragini Bhuyan

Governments should use behavioural science techniques to encourage citizens to achieve the desired policy outcomes, according to a recent research paper by Shlomo Benartzi, a professor at the UCLA Anderson School of Management, and co-authors. In recent times, many governments, from the UK to Singapore, have appointed “nudge units”: teams tasked with using cheap, easy interventions to “nudge” people to change their behaviour. For instance, the White House Social and Behavioral Sciences Team sent out emails to military personnel urging them to save money in the retirement plan offered by the government. The email plan cost only $5,000, but increased enrolment by about 5,200 people and saw contributions of about $1.3 billion in the first month alone. The authors argue that such behavioural interventions are cost-effective, and can be used in tandem with traditional policy measures.

Also Read: Should Governments Invest More in Nudging?

Politicians often undermine democratic accountability in developing countries by making provision of benefits conditional on political support. This is also referred to as political clientelism. A National Bureau of Economic Research (NBER) working paper by Gustavo J. Bobonis, a professor of economics at the University of Toronto, and others shows that such clientelism is driven by poverty, and can decline when a society has greater resources at its disposal. These results are based on a field study in Brazil which showed that households in drought-prone municipalities were more prone to such clientelism to meet their water needs. After some non-governmental organizations began supplying water to households in these areas, which improved their resilience to droughts, the researchers observed a decline in clientelism.

Also Read: Vulnerability and Clientelism

The rising junk food intake among children is often blamed on “lazy” working mothers. But a new research paper published in the Economic and Political Weekly finds that children of working mothers are less likely to consume junk food. The results are based on a survey of 1,416 adolescent students from three schools in Aligarh conducted by Arzi Adbi, a doctoral student in the department of strategy at Insead, Singapore, and his co-authors. The paper addresses the concerns about shifts in dietary habits that arose during the ban on Maggi noodles by India’s food regulator. The researchers found that junk food intake decreased with mothers’ education, but rose with fathers’ education levels and household income. The researchers argue that wealthier, more educated fathers may be more susceptible to junk food advertisements.

Also Read: Analysing the Lazy Mother Argument Inspired by the Maggi Controversy

A new World Bank paper by Aletheia Donald and co-authors examines ways in which women’s ability to determine their life choices can be measured by social scientists. The authors argue that women’s agency, which is important to reduce gender disparities, can be broken into three steps: goal-setting, ability to achieve goals, and acting on goals. The authors cite Relative Autonomy Index (RAI) as one example of a tool that measures the extent to which an individual’s own goals drive their decisions. RAI is a form of a questionnaire that gives participants a choice between three options: the first option asks women if their decisions were driven by coercion. The second option asks them if their decisions were driven by a need to please others, while the third option asks if their decisions were arrived at solely based on their best self-interest.

Also Read: Measuring women’s agency

Flipkart’s generous buyout offer to Snapdeal has raised questions about the manner in which venture capital (VC) firms may strike deals among themselves to decide the fate of firms they have a stake in (http://bit.ly/2ttubHt). A blogpost by Antoine Buteau, a management consultant with PNR, a Montreal-based management consulting firm, shows that syndication among VCs may be quite common, with a majority of VCs building syndicates with other VCs in an attempt to “share risks, build reputation, reduce capital constraints and gain complimentary expertise”. The blog is based on the results of a 2016 survey of 681 VC firms conducted by Paul Gompers, a professor of business administration at Harvard University, and his co-authors, which showed that VCs syndicate 65% of their investments.

Also Read: How Do Venture Capitalists Make Decisions?

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