Note: The arguments made here are based on and further develop those laid out in a working paper with the same title, published as Policy Paper 016 by the Center for Global Development, Washington DC. The authors would like to thank Amanda Glassman at the Center for Global Development for her encouragement and support during the writing of that working paper. We would also like to thank two anonymous referees for their comments and suggestions on an earlier draft of this paper.
Behavioral Design: A New Approach to Development Policy
Article first published online: 4 FEB 2014
© 2014 UNU-WIDER. Review of Income and Wealth published by John Wiley & Sons Ltd on behalf of International Association for Research in Income and Wealth.
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.
Review of Income and Wealth
Special Issue: Poverty, Development, and Behavioral Economics (Comprises Findings of UNU-WIDER Project New Approaches to Measuring Poverty and Vulnerability)
Volume 60, Issue 1, pages 7–35, March 2014
How to Cite
Datta, S. and Mullainathan, S. (2014), Behavioral Design: A New Approach to Development Policy. Review of Income and Wealth, 60: 7–35. doi: 10.1111/roiw.12093
- Issue published online: 4 FEB 2014
- Article first published online: 4 FEB 2014
- behavioral economics;
- program design
Successful development programs rely on people to behave and choose in certain ways, and behavioral economics helps us understand why people behave and choose as they do. This paper sketches how to design development programs and policies in ways that are cognizant of and informed by the insights behavioral economics provides into human behavior. It distills the key insights of behavioral economics into a parsimonious framework about the constraints under which people make decisions. It then shows how this framework leads to a set of design principles that can be employed to design programs in areas including health, education, productivity, agriculture, finance, and the delivery of public services. Finally, it offers some reflections on the ways in which these insights and design principles can be incorporated into existing and planned programs to improve their reach and effectiveness.