Application of Behavioural Economics Helpful for Efficacy of Public Policy

The application of Behavioural Economics can be useful to improve the efficacy of public policy and programmes, according to Nirmala Sitharaman, Union Minister for Finance and Corporate Affairs.

The Beti Bachao, Beti Padhao (BBBP) and Swatchh Bharat Mission became popular and successful with the application of applied behavioural insights, according to The Economic Survey 2018-19.
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 Economic Survey, the key principles of behavioural economics are ‘emphasizing the beneficial social norm’, ‘changing the default option’ and ‘repeated reinforcements’.
The Economic Survey opines 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. Accordingly, the Economic Survey recommends setting up of a behavioural economic unit in the NITI Aayog. It also strongly recommends that every programme must go through a ‘behavioural economics audit’ before its implementation.

Source: PIB