* “If people bring so much courage to this world the world has to kill them to break them, so of course it kills them. The world breaks every one and afterward many are strong at the broken places. But those that will not break it kills. It kills the very good and the very gentle and the very brave impartially. If you are none of these you can be sure it will kill you too but there will be no special hurry.” ― Ernest Hemingway
Although the global rate of extreme poverty is at a historic low, the pace of poverty reduction is slowing and the World Bank estimates that more than 700 million people still live on less than $1.90 a day. The 2019 Robert B. Menschel Economics Symposium discusses the ways behavioral economics can inform development policy to create effective solutions to poverty at the international, national, and local levels.
BESCHLOSS: Good afternoon. Welcome to the second session of the CFR Robert Menschel Economics Symposium. We heard in the earlier session a lot of very interesting things about both theory and some policy, and what we’re going to talk about in the second session is looking at policy but specifically policy in practice and how it’s implemented, and taking advantage of the recent research on behavioral economics and how it impacts poverty-reduction programs.
My name is Afsaneh Beschloss, and I’m founder and chief executive officer of Rock Creek.
I’m very, very excited to introduce our great panel. Of course, they do not need an introduction.
But starting with Varun Gauri, who is at the World Bank. As you know, he is a senior economist at the bank and co-head of the Mind, Behavior, and Development Unit there—and the author of the great report that I’m sure he’ll be talking about.
Liz Hardy is the senior lead of behavioral insights, and she’s at the Impact and Innovation Unit for the Privy Council Office at the government of Canada. And she’s going to be sharing her thoughts about her experience in terms of policy and practice in Canada with their population.
Matthew Klein is the executive director of the New York City Mayor’s Office for Economic Opportunity, and also has been both designing policy and implementing it.
And very, very excited to have all of you here today. I was eager to hear from each of you, if you don’t mind, very, very briefly if possible, what you’re doing today. And maybe we start with you, Matthew, what you’re doing today that is relevant to the topic.
KLEIN: Sure. So very briefly, the Mayor’s Office for Economic Opportunity helps the City of New York use tools of evidence and innovation to address issues of poverty in the city. So that takes a number of different forms. We have an innovation fund where we start and test new models. We use evaluation on broader-scale policies. We integrate data from across agencies to try and help the city more holistically serve low-income New Yorkers.
About two years ago we, in partnership with the nonprofit firm ideas42, launched a behavioral design team, a team that—of behavioral scientists who are essentially embedded within the city, and who we then assign to different projects across the city, with a particular focus on issues of poverty and equity but also some other operational questions. So that team helps us design a variety of interventions or often small nudges to help existing programs work better. Happy to talk about those as the panel goes on.
HARDY: Great. And hi. I’m Liz Hardy. I work at the Impact and Innovation Unit, where I manage the behavioral science team there. We run randomized controlled trials, small- to medium-size experiments testing to see what works using behavioral insights and behavioral science principles.
We work in a variety of domains—public policy domains across Canada. That includes diversity and gender issues, financial inclusion, and also environmental issues. And we do, as well, have a focus on poverty reduction.
GAURI: So I co-lead the Mind, Behavior, and Development Unit—eMBeD, we call ourselves—at the World Bank. We’re the behavioral science team at the World Bank. We work in sixty-plus countries across all of the sectors. Our mandates are to improve development effectiveness by integrating behavioral science into development projects, World Bank projects as well as government programs and other partner programs, to institutionalize behavioral science in governments. We spend a lot of time building capacity and working with partners. And we also provide public goods like research and training. The team grew out of the World Development Report 2015: Mind, Society, and Behavior, in which we tried to summarize what behavioral science and behavioral economics means, and the implications of those fields for development altogether.
BESCHLOSS: The field we’re discussing, the use of behavioral economics in—using it to reduce poverty, is a relatively new area, and some would say risky. I’m just curious, when did you all decide to get into this area? And maybe, Matthew, we’ll start with you because you were a lawyer, I think, to start with.
KLEIN: Well, I went to law school. (Laughter.)
KLEIN: So one of—we were attracted to behavioral science for a number of different reasons. I mean, one is that a sort of a core element of it or a core promise is that small changes can have a meaningfully significant impact at a very low cost. So large scale, low cost, very attractive to government. And we’d seen sort of proof of concept of this, at least within the U.S., out of the White House. Under Obama there was a—and that, of course, built on work that was happening in the U.K. And these folks have a better sense of the international context.
But we wanted to do that at the city level because everything is already designed. There’s already—you know, a notice is already designed, an intervention, a program, and government is about trying to get people to do the things that we as a society want them to do. And since everything is already designed, if we can change it or tweak it using the insights that come from behavioral science and get a better result at a low cost, a very attractive proposition.
YOUTUBE: Policy in Practice: Addressing Poverty with Behavioral Economics. POVERTY IN PRACTICE
The publication is not an editorial. It reflects solely the point of view and argumentation of the author. The publication is presented in the presentation. Start in the previous issue. The original is available at: cfr.org