Pakistan can benefit by infusing nudges in policymaking by identifying potential areas like tax collection and controlling Hundi/ Hawala where it can offer low cost-effective solutions to address simple problems.
This was the crux of discussion organized by UNDP Pakistan, in collaboration with Ministry of Planning Development and Reform and Swiss Development Cooperation at the launch of the 22nd issue of the Development Advocate Pakistan (DAP) under the theme 'Nudging for Development.'
The launch also included a panel discussion on 'Nudging for Development' in Pakistan, and ideas on key development issues and challenges in Pakistan.
Deputy Chairman Planning Commission Dr Jehanzeb Khan appreciated the UNDP Pakistan and Swiss Development Cooperation for their efforts in bringing a new concept to the forefront, bearing potential to influencing behaviours as low-cost solutions for addressing problems. Nudge can be used as a tool and mechanism for improving development, tax collection, controlling Hawala/Hundi culture like issues in the country, he added.
Nudge is small 'push' in the direction that leads people to imperceptibly opt for choices that benefit them. The issue introduces a variety of thematic areas where nudges have been employed globally and the tremendous positive impact they have had.
"Nudges are based largely on non-economic incentives; they are relatively easy to use and effective in influencing behaviors," said Ignacio Artaza, Resident Representative a.i., UNDP Pakistan. "For this reason, the potential in Pakistan is tremendous. Pakistan can benefit by infusing nudges in policy making."
Nudge units based on the models of international ones can be established in the public sector. These units can work on identifying potential areas where nudges can offer low cost-effective solutions in addressing simple problems. Much research needs to be done in this sector and the private and public sectors must work together in incorporating what can rightly be described as the future of global business, he added.
The UNDP official said that adding visual cues leading to dustbins managed to decrease littering rates by 46 percent in Copenhagen, Denmark, adding bright warning signs before dangerous curves led to a 35 percent decrease in accidents in the United States; and using a popular children's television program in Iceland, to promote healthy eating behaviors led to an improvement in children's diets by 22 percent.
Attributed to as 'nudges', these cues influence behavior towards a certain angle. Nudges are not largely based around economic incentives; rather, they focus on targeting the psychological nature of an individual by offering him/her 'attractive options'. In essence, they do not necessarily coerce people into accepting a certain option but use cues to steer people in directions that they can then choose from, experts added.
Development Advocate Pakistan (DAP) is a quarterly policy magazine of UNDP Pakistan and Swiss Development Cooperation. The latest issue of DAP on Nudging for Development features a combination of analysis and public opinion articles by national and international experts including Dr Fadi Makki, Raheel Waqar, Nathan Maddix, Saugato Datta, Huma Khan, and Tom De Bruyne.
For nudges to be effective they must offer only a minor change in choices as most of the choices/judgments made by people are automatic rather than deliberate; second, they must appeal to social norms as people tend to follow what is more socially acceptable; and third, they should relate to local culture. Nudges are not new: corporations have been using them for years in marketing to influence consumer behavior, but what is new is the use of nudges by governments to seek behavioral change on issues related to public policy and local governance such as health, transport, waste disposal, etc.
The 22nd issue of Swiss Development Cooperation and UNDP Pakistan's quarterly policy publication, the Development Advocate Pakistan also discussed the concept of nudges in detail and presented a series of case studies which showcased how nudges can be enacted in almost every sphere.
As nudges are based largely on non-economic incentives, they are relatively easy to use and effective in influencing behaviors. For this reason, the potential in Pakistan is tremendous. There are plenty of areas where nudges can be employed. For instance, by tax authorities to promote timely submission of tax returns as done in London where reminder letters from the Queen helped collect more than GBP 9 million in over a period of 23 days.
Further, by local administration to address the problem of littering, food and water wastage for example in the United Kingdom where ballot bins helped reduce littering by 20 percent. By influencing people's behaviour, nudges complement government directives and actions. For example, the recent ban on use of plastic bags in Islamabad can be supplemented by designing nudges to motivate residents and businesses to discontinue the use of plastic bags and adopt sustainable means to carry their groceries and dispose waste.
Experts included Dr Farah Said, Raheel Waqar, Hasnat Masood, Samar Hassan, Dr Shahida Saleem, and Daniel Valenghi.
The event was attended by government officials, behaviour experts, students, and other stakeholders.