Introducing Behavioral Economics to Post-Conflict Development in Pakistan

The practice of Nudging is a data-driven and experimental approach gaining ground around the world as a public policy tool. UK has led a global trend to establish a behavioral insights unit followed by various governments, public institutions and international organizations following suit. OECD Behavioural Insights and Public Policy report provides a comprehensive overview of behavioral insights used by various governments through the account of 100 case studies from various sectors from education, energy, environment, health, taxes, telecommunication and public service delivery.¹Various countries have established their own Nudge units including US, Singapore, Australia, and Denmark. Indian state Tamil Nadu like many other countries such as Mexico, UAE, Kenya, Kuwait, Indonesia, Peru, have signed MOUs with innovation labs like BIT, ideas 42, the World Bank and J-PAL.² Moreover, International organizations like the World Bank and United Nations have increasingly focused on applying behavioral insights in ‘developing’ societies as well as post-conflict societies of Papua New Guinea and Jordan.³ The successes of UN in using behaviorally informed approaches in conflict-affected communities shows its usefulness as a public-policy tool.

There is potential for behavioral economics to improve the effectiveness of the government in designing and shaping the post-conflict development landscape. Psychologist have long researched all sorts of cognitive biases and ‘heuristics’ that lead people to make choices that are not always in their best interests.⁴ From using this data, behavioral economists claim that it is possible to steer people towards better decision-making and rearranging the way choices are presented.⁵ This is what has commonly become known as nudging. In essence, Nudging challenges the assumption that people’s behaviors are guided by rationality and explain that humans are indeed homosapiens who err frequently in making rational judgments and decisions thus are not homo economicus.⁶ Thus, Nudge provides a softer approach to bring change in people affected by conflict as compared to traditional methods such as fines, direct instruction and laws.

However, one of the first questions that confronts this line of argument is what exactly does behavioral economics have to do with post-conflict society. The answer lies in the differentiation that behavioral economics is a scientific sub-discipline and ‘nudges’ are an application of its’ findings in policy. To elaborate, it is important to understand that humans do in fact respond to incentives just as the economic man. However, incentives can come in different forms. If steps are taken to increase people’s cognitive effort such as by placing candy in a more obscure place in the shop to encourage healthy eating habits—it can be said that the “cost” of choosing candy is increased. In this case, the nudge has imposed cognitive (rather than material) costs and altered incentives for the individual.⁷ Thus, it is a matter of interest to investigate how such behavioral insights about collective action can be useful to increase civic engagement specifically in conflict affected region of ex-FATA, Pakistan.

In the context of Pakistan, nudging is an emerging policy strategy being widely used in public health, water conservation, and tax collection. Researchers in Pakistan developed nudges to encourage the adoption of COVID behaviors through the corona-virus caller tune instituted by the government.⁸ Furthermore, in Pakistan, UNDP has led efforts to promote the use of nudges in the domain of social development and advancement of the Sustainable Development Goals (SDGs) including nudges to increase local property tax collection.⁹ Given such developments, behavioral economics should be integrated at the policy level for post-conflict analysis as its basics are about behavior, attitudes and perceptions, since Pakistan has been confronted with challenges in post-conflict recovery and mainstreaming of the newly merged districts (NMDs) which have undergone conflict and are now constitutionally merged with the province of KPK.

After years of political isolation and marginalization, NMDs face the challenge of increasing civic engagement and building trust in the new governance system. As courts and police stations are being set up in newly merged districts, behavioral economics can also play a role in creating ease in the process by which the citizen utilize the state institutions. Moreover, operational transparency can be trialed as demonstrated by other studies. A working paper by Harvard Business School outlines an experiment in Boston to increase trust which showed images of public work having a positive impact on the resident’s trust and engagement with the administration.¹⁰ Thus, it is suggested that just reducing the ambiguity and uncertainty for the people increases a level of trust for the process. Similarly, study in Sargodha indicated that truthful information about reduced delays in courts led to citizens reporting higher trust in state courts and reduced reliance on alternate dispute resolution councils such as Panchayats and Jirgas.¹¹ Consequently, it can be useful to communicate accurate information about the state process to increase people’s trust and engagement with the state institutions.

Therefore, if an intervention is designed to communicate relevant information to the citizens, it is equally important to consider the mediums of outreach. For nudge design, it will be important to chose a medium of outreach that can reach a maximum audience. It can be suggested that Pakistan post can be leveraged which is often unrecognized yet has wide outreach. An interesting intervention used in COVID response in UK was a letter from Boris Johnson sent to all residents to communicate precautions and ensure compliance to COVID- related behaviors. Such campaigns are novel and tend to create great impact. Thus, similar campaigns are low-cost interventions that can be contextually designed to achieve objectives of policy makers and further the goal for national cohesion and mainstreaming NMDs.

About the Author

Madiha Hassan

The author is a Junior Research Fellow at Roads Initiative.