Overview

1. Economics and Public Policy2. Inter-disciplinarity3. Behavioural Science4. Examples and Applications 5. Irish Public Policy

"In reflecting on any action, which I am to perform a twelve-month hence, I always resolve to prefer the greater good, whether at that time it will be more contiguous or remote; nor does any difference in that particular make a difference in my present intentions and resolutions. My distance from the final determination makes all those minute differences vanish, nor am I affected by any thing, but the general and more discernible qualities of good and evil. But on my nearer approach, those circumstances, which I at first over-looked, begin to appear, and have an influence on my conduct and affections. A new inclination to the present good springs up, and makes it difficult for me to adhere inflexibly to my first purpose and resolution. This natural infirmity I may very much regret, and I may endeavour, by all possible means, to free my self from it. I may have recourse to study and reflection within myself; to the advice of friends; to frequent meditation, and repeated resolution: And having experienced how ineffectual all these are, I may embrace with pleasure any other expedient, by which I may impose a restraint upon myself, and guard against this weakness."

Economics and Public Policy

• Scottish Enlightenment• Pareto Turn in Economics• Samuelson and Friedman• Econometrics Society• Economists as gatekeeper of knowledge in

public policy

Interdisciplinarity and Public Policy

• Complexity of many issues• Measurement Paradigms• Team-based Science• Motivation: Efficiency, Stability, Necessity,

Reciprocity. (Ankrah & AL-Tabbaa, 2015)

Challenges of Interdisciplinarity

• Assessing quality across fields• Beer-mat inter-disciplinarity

• “Beer-mat knowledge” Vs. Interactional/Contributory Expertise

• Incentive problems• Meaningful contributions Vs. Re-labelling

• Career structures• Collaboration framework

• Boardman and Corley (2008) : estimates of researcher time-use

Behavioural Science and Public Policy

• 20th century challenges• Herbert Simon • Kahneman/Thaler/Sunstein• Libertarian Paternalism• Behavioural Science and Law

Economics can’t afford to overlook the role of emotions in decision making: pain, pleasure, arousal,

hunger, thirst, anger, hatred, contempt, pity, etc...

“Animal Spirits”

To understand how economies work and how we can manage them and prosper, we must pay attention to the

thought patterns that animate people’s feelings and ideas, their animal spirits”. We will never really understand

important economic events unless we confront the fact that their causes are largely mental in nature

Akerlof and Shiller

10

Behaviourally Informed Regulation

Measurement and Evaluation

• Naturalistic Monitoring• Comparison of Lab and

Field Experiments • Measurement of

Consumption and Well-Being

• Eliciting Economic Preferences

Life-Cycle Economic Behaviour and Outcomes

• Self-Control and Life-long economic welfare

• Dynamic Interactions between mental health and economic outcomes

• Non-cognitive traits and economic preferences

Ethical and Legal Aspects of Behavioural Science

and Policy

• Ethics of Nudging• Dark Nudging• Implications of BE for

Regulation • Implications of BE for

development of law

UCDBSP Key Research Themes

Research

• Based in Geary Institute• Three Overlapping

Streams • Development of cohort

of PhD and Postdoc Researchers

• Wide range of seminar activities

• European Networks

Education

• UG Module• MSc in Behavioural

Economics• Exec Education• European Collabs• PhD & ECF training

Industry and Policy

• AIB Financial Decision Making Lab

• Amarach Collaboration• Carr Collaboration• IGEES & Public Policy

UCDBSP Main Branches of Activity

Example 1: Benefit Sanctions

• Economic Theory and Incentives for Job Search • Psychology of Unemployment • Importance of administrative law

considerations • Wider behavioural science of job market

activation

Benefit Sanctions: Overview

• Global Financial Crisis• Implementation of Austerity Policies• High Focus on Working Age Benefit Policies• Job Seekers Allowance • Employment and Living Support Allowance• Issues of Effectiveness • Issues of Administrative Justice• Mental Health Effects

Benefit Sanctions: Literature to Date

• Qualitative accounts of process problems with implementation of sanctions• Economic literature on partial success of moderate

sanctions in high growth economies e.g. Blundell et al late 1990s• Webster quantification of scale of sanctions• Loopstra, Reeves, and others association with

foodbank use

Benefit Sanctions: Research Agenda

• What is the source of the sharp spatial and temporal distinctions in benefit sanctions? • Are benefit sanctions at local level related to

psychological distress among those claiming working age benefits?• Did they lead causally to different employment outcomes? • How to design job activation systems that empower

employment search without causing serious harm

Example 2: Pension Auto-enrolment

• Life-Cycle Consumption Model faces many challenges• Under-saving and under-annuitisation • Low elasticities to taxation incentives • High impact of changes in default structure • Wider behavioural science of economic

behaviour

Auto-enrolment: Active Market Structuring

Benartzi & Thaler (2004), Save More Tomorrow, Journal of Political Economy

Auto-enrolment: Encouraging Pension Saving

No Default Default 0.8 Default 4 Default 80.00

5.00

10.00

15.00

20.00

25.00

Optimal and experimental saving rates

Optimal saving rate Experimental saving rate23

Auto-enrolment: Defaults as Recommendations

Models for Irish Public Policy• SFI Center for Behavioural Science

• US: NSF approach to interdisciplinarity and Behavioural Sciences

• Govt and Regulatory Insights Teams• U.K. Behavioural Insights Team

• National PhD (Sphere)• Dublin Industry and Regulatory cluster

• “regional ecosystems of related industries and competences featuring a broad array of inter- industry interdependencies” (EU Cluster Policy)

• University Policy Research Institutes • The role of the Whitaker and Geary Institutes

University Policy Research Institutes

• Foster collaboration: • Forums for rapid feedback

• Holding pens for inter/transdisciplinary work• Interdisciplinary education and professional

development:• Internships/Masterclasses/Summer Schools

• Further develop transdisciplinary approach:• Residencies from policy

Back to Hume

• Grounded economic science• Empirical not dogmatic• Blurring edges between disciplines • Behavioural Science and Public Policy

• “We often act knowingly against their interest”

“The challenge to us all is to perfect both our methods of appraising what needs to

be done and our democratic procedures for achieving our national aims.”

Dr. T.K. Whitaker