Application of behavioural economics can play key role in success of public policies: Economic Survey

The Economic Survey 2018-19 has favoured detailed application of 'behavioural economics' as an instrument of change in India where social and religious norms play a dominant role in influencing behaviour.

This is based on the premise that decisions made by real people deviate from the impractical robots theorised in classical economics. "Drawing on the psychology of human behaviour, behavioural economics provides insights to 'nudge' people towards desirable behavior," says the Economic Survey.

Quoting the success of popular government schemes in recent times like Beti Bachao, Beti Padhao (BBBP) and Swachh Bharat Mission (SBM), the Economic Survey says that these schemes have successfully applied behavioural insights to enhance policy impact.

For example, '#SelfieWithDaughter' on social media became a worldwide hit and the celebration of the girl child quickly became the norm to which more and more people wanted to conform.

Similarly, use of socially and culturally identifiable names for various recent schemes like Namami Gange, Ujjawala, Poshan Abhiyan among others have helped to build the affinity of the people for the scheme.

The community based approach to sanitation in SBM with the help of Swachhagrahis whose similarity with Satyagrahis, helped to reinforce the message. The gender empowerment component of SBM helped to become a complement the Beti Bachao, Beti Padhao scheme.

According to the Survey, the key principles of behavioural economics are 'emphasising the beneficial social norm', 'changing the default option' and 'repeated reinforcements'.

It said that while several Indian programmes have applied the principles of behavioural economics, there is still ample scope for leveraging these insights to enhance the efficacy of programmes in India.