Nudge fever

July 22, 2008 by · Leave a Comment
Filed under: Public policy, Social brain 

Following Richard Thaler’s speech here last week about his book Nudge I have had several calls from journalists. As is often the case with policy fads there is now something of a backlash as commentators realise that ‘nudging’ is really no more than a set of clever techniques and not quite the new paradigm implied in some quarters.

The most widely touted example of a nudge proposal was George Osborne’s advocacy of a recycling reward scheme modelled on Recycle Bank a highly successful US initiative.

Recycle Bank is an impressive scheme overseen by an NGO which works in partnership with local councils to pick up recyclable rubbish and then hand out reward vouchers redeemable in local stores to those who recycle. From what I can ascertain the scheme starts from the assumption that there is no existing municipal scheme so that any recycling that takes place is a direct consequence of the scheme.

This is important because were there to be any existing scheme – as there is in the vast majority of UK local authorities – then this example of ‘nudge’ comes up against a classic problem with policy based on financial incentives; the dead weight. Osborne asserts that the policy is redistributive because:

While the poorest households were previously the least likely to recycle, as soon as they start receiving a financial incentive for recycling, they typically become amongst the most likely households to recycle’

This may be true once the policy is in place but at the point of implementation the scheme would involve rewarding those who are already recycling.

If, as Osborne tells us, the current recyclers tend to be better off the first effect of implementing the scheme is to give middle class families a reward for something they were already doing for free. The dead weight problem doesn’t necessarily kill a policy. The Government’s Educational Maintenance Allowance to disadvantaged 16-18 year old who stay on at school has been seen as a success despite a huge dead weight cost.

Recycle Bank has the feel of a neighbourhood NGO initiative (albeit one that is taking place in hundreds of places), so arguably it’s not the kind of scheme people might be inclined to fiddle. But given how many people are hostile to any type of government, a local authority scheme would have to address another classic policy conundrum.

How do you get the incentive right; just big enough to change behaviour but not so big to encourage cheating (people nicking each other’s recycling or putting bricks at the bottom of their bin). If this sounds cynical, remember the ill-fated Individual Learning Accounts (ILAs) which foundered when rogue training companies were set up to farm people’s ILAs splitting the proceeds between the bogus trainers and bogus trainees.

I remain a fan of nudging but policy making is complex and policies that look clever on paper and work with college students can founder when they are taken up by citizens and those on the lookout for a quick buck.

In an echo of the strange world of quantum mechanics the moment a policy is implemented it changes the context for which the policy was devised and is therefore bound to produce unexpected and sometimes perverse outcomes.

To end with another issue with incentives; if everyone takes up the scheme they quickly come to see the ‘reward’ as an entitlement. And if they then are refused the reward because they fail to recycle they see this as a punishment. In other words, if the policy of rewarding is too successful is comes to feel like the policy of fining it was supposed to replace!

It is this complexity plus the importance of underpinning schemes like these with a high level of public buy-in that leads me to conclude that such ideas work much better at the local level. That’s why the Conservatives are arguing for their policy to be a council initiative. However English Council areas are so big that to many residents the town hall is as distant and oppressive as Whitehall.

Changing behaviour is hard. Nudging is a useful technique but it doesn’t abolish the classic dilemmas of policy making.

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Politics and the future state

July 7, 2008 by · Leave a Comment
Filed under: Credit crunch, Politics 

David Cameron’s Party is developing what can be seen as their own third way. Thatcherite Conservatives eschewed social ambition and were sceptical about the state. Labour has tended to combine a big social project with confidence in the capacity of Government. Today’s Tories seek to combine a commitment to goals such as social justice and community cohesion with a critique of big government. This is what opposition ministers mean when they talk about pursuing ‘progressive ends through Conservative means’.

Responding to the Tory critique, and to public perceptions that services are not delivering value for money, Labour has sought to make the case for an ‘enabling state’.  Ministers promise greater decentralisation to local authorities and neighbourhoods and more power to service users.

The Government is not only championing the idea of personal budgets for social care clients – something considered dangerously radical until a couple of years ago – it is even talking about extending the principle to those with long term health conditions.

This is a key battleground. Progressive commentators like Polly Toynbee warn loudly about the impact on public services and poor communities of the Conservative approach, while Opposition spokespeople lose no opportunity to attack what they see as the innate statism of the Brown Government.

In a recent interview with Oliver Letwin, I asked for some examples of the kind of civic initiatives the Tories rely upon to take up the space left by a receding state. He offered Dick Atkinson whose community campaign against curb crawling in the Birmingham district of Balsall Heath attracted praise from all quarters. But Atkinson’s campaign must be a decade old and its continued prominence in these debates suggests a paucity of other examples of successful sustained community initiatives in poorer areas. The Conservatives will need stronger evidence that civil society can square the circle of social ambition and a reduced state.

Labour can point to real gains in public service performance, for example, shorter average NHS waiting times and a declining number of ‘failing’ schools,  but it is far from clear that those communities most dependent on the state have been ‘empowered’ by ten years of Labour rule. Some disadvantaged estates have seen real improvements but for most the dependency culture appears alive and well, something opposition parties are likely to highlight during the Glasgow East by-election campaign. Furthermore new pubic concerns such as that over the epidemic of knife crime in London leave state agencies seemingly powerless to address either the expressions or the causes of social dislocation.

So while the parties seem to agree about what they disagree about, arguably, they both face a credibility gap.

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Social care sector leads the way?

June 25, 2008 by · Leave a Comment
Filed under: Public policy 

I’ve just returned from speaking to the final annual conference of the Commission for Social Care.  My speech had to be cut right down, which, given the fee the CSCI was paying to the RSA, meant I achieved a pounds per minute rate rivalling Jonathan Ross!  But it was worth cutting back to hear a splendid speech by Ivan Lewis.

It can’t be much fun being a Government minister at the moment, but Ivan’s speech was passionate, honest and full of ideas.  But the other thing that really hit me about the conference was the number of social care users (clients and carers) playing a full role.  As I’ve said in previous blogs, social care has gone from being deeply unfashionable to being the most innovative public service, in large part due to the commitment across the sector to user engagement.  I was struck by the contrast between the many users I saw today and the fact that one rarely sees students or parents playing an active role in education conferences.  At a recent RSA Opening Minds conference, it was the student who stole the show, but I have spoken at many other gatherings of head teachers, officials and educationalists and the user voice has been almost entirely absent.

10 years ago, anyone would have been surprised to be told that the social care sector would become innovative than education.  I wonder how much of the explanation lies in listening to the voice of the user.

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The post-bureaucratic state

June 18, 2008 by · 1 Comment
Filed under: Politics, Public policy 

Interesting feedback from the Conservative Shadow Cabinet Away Day on the ‘post-bureaucratic’ state.  The appeal of David Cameron’s new Conservative brand is that it combines social ambition with scepticism about the state.  In a sense, this is Cameron’s own ‘third way’ between Labour’s traditional combination of social ambition and faith in the state on the one hand, and a neo-liberal indifference to social outcomes on the other.

However, my informant (who shall remain nameless on the basis of Chatham House rules) tells me that the more the Conservatives discussed how they would devolve power to the community and increase the capacity of civil society, the more they ended up feeling that they were creating more public sector jobs and functions.  The fact is that capacity doesn’t simply spring up from nowhere and, even if you pass responsibility to community and third sector organisations, there is still need for public accountability.

I wonder whether the Conservative conundrum is a reflection of the more profound problem I described last year as the ‘social aspiration gap’.  Ultimately, whether or not we use public, private or voluntary sector agencies, we will not give those agencies the resources and support they need unless we recognise that we must change the way we think and behave.

We may be dissatisfied with the state and thus amenable to the Conservatives’ ‘post-bureaucratic’ message, but it would be wrong to think this will solve the really hard question: how are we to prosper and survive unless we are willing, each of us, to be more positively engaged in collective decision making, to live more self-sufficient lives, and to be more altruistic to our families, communities and strangers?

The Conservatives are asking exactly the right question but it will take political courage to provide the kind of authentic answers that the public is currently unwilling to hear.

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