Behavioral economics and public policy

Saturday, December 06, 2014

Cass Sunstein in Simpler. The Future of Government:

My own experience in government was that in tough cases, the real issues usually mainvoved the facts, not values, and certainly not which interest groups to favor. When people in government are discussing a rule, a central task is to ascertain those facts. What would a rule accomplish? What would it cost? If people are able to get clear on the actual effects of a rule —whether it involved highway safety, energy efficiency, clean air, workplace safety, or education— they are far less likely to disagree.

The book is an admitedly disorganized collection of thoughts about regulatory design and cost-benefit analysis from the perspective of behavioral economics. What makes the book stand out is that it is based on the experience of a very distinguished scholar as administrator of OIRA, the White House Office of Information and Regulation during Obama’s first term. It is a light book, and when I started reading it I thought it would be nice to see the author going into greater analytical depths, but the case in favor of evidence-based policy-making is probably more convincing this way: with examples of policies that have clear results, grounded in an uncomplicated psychological theory.

However, any reader will notice one salientable omission. The book conflates ideological with partisan disagreement, to the point that political conflict only appears as background noise. As the quote makes clear, the book is centered around policies that can be separated between things that work and things that do not work, which is a very specific subdomain of public policy, albeit an important one.

Dialogue & Discussion