Innovations
October 9, 2014

Nudge: Small changes, dramatic results

As a result of Blueprint 2020, the public service has been adopting new perspectives and ways of working together to respond to policy and service delivery challenges. The Destination 2020 report released in May announced the creation of a new Innovation Hub that will provide expertise and advice to departments and agencies on emerging areas and will help change the way the government of Canada does business.

Innovation hubs and change labs apply new approaches and collaborative processes to address policy, program and operational challenges. They develop, prototype, test, assess and refine new solutions, creating an environment that is open to experimentation. The mission of the Innovation Hub is to advance the understanding and application of new policy approaches and tools. It will support departments and agencies in applying new methods such as behavioural or “nudge” economics.

In April, Natural Resources Canada launched their own innovation hub called IN.spire, which aims to explore and adopt new ways of working, consistent with their departmental Blueprint 2020 Action Plan. IN.spire is currently leading and providing support on a variety of initiatives such as micro-assignments, open badges and prize challenges.

Employment and Social Development Canada is developing a departmental Change Lab, which intends to bridge policy, program, and service perspectives while supporting innovation in service design and delivery. Construction of the Change Lab is expected to be completed by the end of the year.

Behavioural or “nudge” economics is based on research that shows it is possible to guide individuals toward better decisions by presenting choices in different ways. A “nudge” has the ability of altering a behaviour in a predictable way without forbidding options or considerably changing economic incentives. Behavioural insights enable the development of policies that can encourage and support individuals in making better choices for not only themselves, but for society. There is a rising interest among governments in understanding the unknown forces of human decision-making in order to design policies to “nudge” individuals to act in a socially, economically and environmentally responsible manner.

In May, the Canada School of Public Service (CSPS) held a special learning event for executives called “Harnessing the Power of the Nudge” with Dr. David Halpern, director of the U.K. Behavioural Insights Team. The session focused on ways to develop policies that will encourage individuals to make better choices, particularly in times of fiscal restraint, when organizations are struggling to “do more with less.” According to Dr. Halpern, the key to this challenge is to not only find, but harness, the most effective ways to influence behaviour.

Dr. Halpern’s innovative Behavioural Insights Team uses an understanding of human motivation and self-interest gathered from academic research in behavioural economics and psychology to create cost-effective initiatives. His team tackles issues ranging from unemployment to crime to nutrition that have led to some remarkable improvements such as a 15 percent increase in income tax payment rates, just by altering the wording of relevant forms.

The APEX Symposium held in June featured a panel discussion that looked at the “nudge” approach and how it can be used to influence public sector working practices. It is about smarter service delivery; for governments nudge is a low cost action that can yield immense returns.

In July, the Institute on Governance (IOG) and Canada Revenue Agency (CRA) co-hosted a half-day event examining the theory and practice of behavioural economics (nudge theory) as it applies to policy development in the government of Canada and abroad. Forty-five public servants attended the session which included government case studies, panel discussions, presentations and group exercises.

“Games with rewards” is another evolving policy tool aimed at impacting behaviour. Industry, educational institutions and now government have embraced the idea of changing behaviour through gamification and are continuing to explore the realm of possibilities.

Within the government of Canada, a Community of Practice on Behavioural Economics was recently formed to work horizontally and collaboratively across departments and agencies in the development of expertise in behavioural economics, which will help improve policies, programs and services for Canadians.

If you are interested in learning more, the IOG has developed an Innovation and ‘Nudge’ Economics – New Policy Frontiers boot camp and will be offering sessions in November and February to help prepare public servants for the new world of policy development, as well as improve program delivery and strengthen client focus.

With concepts like behavioural or “nudge” economics, integrative and design thinking, there is great potential to turn small changes into dramatic results while discovering innovative techniques to achieve policy objectives. Policy development has a promising future ahead that will have a positive impact on the public service and Canadians.

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