For an effective ‘Swachh Bharat’ mission
Behavioral economics is a relatively new subject. It came into the public limelight in 2002 when a psychologist Daniel Kahneman won the Nobel Prize for Economic Sciences. Kahneman’s best-selling book “Thinking, Fast and Slow” brought the subject to the attention of policy makers. In 2013, it was Robert Shiller, who won the Nobel Prize for Economic Sciences. Shiller had also touched upon the subject of behavioral economics in his books titled, “Irrational Exuberance” and “Animal Spirits, how Human Psychology drives the economy and why it matters for global capitalism”. With such academic recognition, public policy makers could no longer ignore the nascent subject. Both London and Washington took up the discipline and applied the subject to public policy making. The United Kingdom created its Behavioral Insights Team, as did the US government.
Behavioral economics studies the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and the consequences for market prices, returns, and the resource allocation. The subject also addresses the inherent irrationality of a consumer. Marketing executives have long been aware that irrational choices help shape consumer behavior. People make decisions on the basis of heuristics. In psychology, heuristics refers to decisions taken based not necessarily on logic but rule of thumb. Heuristics <g data-gr-id="76">are</g> often mental shortcuts. The other factor that guides people in the process of decision making is ‘framing’. People rely on anecdotes and stereotypes, which act as filters for any decision taken. Behavioral economics, therefore, helps policy makers understand how small changes in the details of an offer can influence the way people react. Marketing executives use the principle knowingly or unknowingly.
Governments also use it, although the subject barely touches its framework.
A case in point is Prime Minister Narendra Modi’s <g data-gr-id="73">Swachh</g> Bharat campaign. The mission is arguably the first effort on the government’s part to use behavioral economics in public policy making. Cleanliness is not merely a fad, but a basic necessity for an economy to prosper. Along with other developing economies, India figures poorly on the scale of cleanliness. The economic cost of the same is huge if we care to add the expenditure on healthcare by individuals and the need for state support. Unfortunately, India never cared to pay much attention to the economic benefits of cleanliness. Prime Minister Modi deserves praise for establishing cleanliness as a national priority. With such a mission, he has knowingly or unknowingly ventured into the realm of behavioral economics.
If the government computes the economic cost of unhygienic living conditions, the same will make
headlines in the media for a few days before it slides back into oblivion. The <g data-gr-id="71">Swachh</g> Bharat movement, therefore, had to be positioned as a desirable social movement. Akin to the ice-bucket challenge, Modi nominated celebrities to participate in <g data-gr-id="72">Swachch</g> Bharat movement. The idea did generate a lot of publicity for the cleanliness mission. However, did the campaign produce any tangible result apart from the media interest it generated?
Along these lines, the rules of behavioral economics come into play. According to Nobel Laureate Daniel Kahneman, such campaigns do not merely fall into the realm of behavioral economics but behavioral psychology. In traditional economics, our choices are made up of rational decisions, arising out of multiple choices available. The issue here is how rational are such decision takers. For people defecating in the open, the choice is between an additional expenditure of constructing a toilet and relieving oneself at no cost. Rickshaw pullers in Varanasi told various NGOs cleaning the Prabhu Ghat that they could not afford to spend five rupees for using the toilet available in their neighborhood, given their meager daily income. Therefore, the challenge is to convince them into using the toilet.
There are two ways to make them do so. One option is to punish them for defecating in the open. The other is to provide them economic and health incentives to use the toilet.
Kahneman had observed that people change their behavior when faced with a loss than with gain. Punishing the rickshaw pullers for defecating in the open is tantamount to loss, while offering them information about the adverse health effects of open defecation, is equivalent to gains and incentivises them to construct or use toilets. Of course, for the people of Varanasi municipality, behavioral economists can suggest other solutions to solve their local cleanliness concerns. One point is clear – no amount of hype, through cleverly created ice bucket type social media challenge, will encourage the rickshaw pullers of Varanasi to stop defecating in the open.
Cynics will remark that people have been defecating in the open since time immemorial. Therefore, why add an extra element of <g data-gr-id="74">Swachh</g> Bharat to deter them. Is it not an issue linked with affordability? It is a valid question. Demand for a product depends on the need for it at that moment. A thirsty man will look for a drink not a pair of shoes. People must realize the necessity for toilets to go for the same. For that, the societal behavioral pattern must undergo a radical change. Such cleanliness missions cannot be achieved merely through persuasion but needs what Garry Becker called “an economic type solution”. <g data-gr-id="75">Swachh</g> Bharat thus falls in the realm of behavioral economics. The success of the move will depend on how soon the government can arrive at the magic formula.