Inaugural African Behavioral Economics Symposium
The Centre for Public Policy and Competitiveness at Strathmore Business School and the Busara Center for Behavioral Economics held the first ever African Behavioral Economics Symposium.
The Symposium was held to discuss on the link between Behavioral Economics and Public Policy.
They had a high turnout of Master in Public Policy and Management Students, key policy makers and influencers from the development partners, research institutions, and universities who engaged in discussions on the potential applications and implications of behavioral economics in addressing Kenyan social issues. They critically looked at:
- How policy makers can use behavioural economics to ensure citizens pay taxes on time
- How policy makers can use “nudge” tools to instill a saving culture among low-income groups?
Behavioral economics has transformed our understanding of how people make economic decisions and has recently gained significant traction in shaping policy. Behavioural economists have found that all sorts of psychological or neurological biases cause people to make choices that seem contrary to their best interests. For centuries, economists have consistently argued that economic man makes logical, rational, self-interested decisions that weigh costs against benefits and maximize value and profit to him. Economic Man is said to be an intelligent, analytic, selfish creature who has perfect self-regulation in pursuit of his future goals and is unswayed by bodily states and feelings. Economic Man is a marvellously convenient pawn for building academic theories. However, Economic Man has one fatal flaw: he does not exist.
We tend to think people are driven by purposeful choices, we think big things drive big behaviors: if people drop out of school, we think they do not like school. Instead, most behaviors are driven by the moment. They are not purposeful, thought-out choices. That is an illusion we have about others. Policymakers need to be more cognisant of psychological and emotional biases and do their best to mitigate them. Cognitive biases, assumptions, and blind spots can derail good policy-making. The idea of “nudging” is based on research that shows it is possible to steer people towards better decisions by presenting choices in different ways. Behavioral solutions have the potential to transform organizations results with minimal alterations at low cost. The UK governments Behavioral Insights Team (BIT) uses the discipline to create better policies, and in February was part privatized with a mission to advise governments around the world. The White House announced its own behavioral insights team last June.
The selected speakers for this event were:
- Johannes Haushofer, Assistant Professor of Psychology and Public Affairs at Princeton University and formally a Prize Fellow in Economics at Harvard University and a Postdoctoral Fellow at the Abdul Latif Jameel Poverty Action Lab at MIT
- Jeremy Shapiro, a co-founder and former director of GiveDirectly and a visiting scholar at Princeton University
- Tobias Kalenscher, is Professor of Comparative Psychology at Heinrich Heine University Düsseldorf
The past decade has been a triumph for behavioral economics, First there was the award in 2002 of the Nobel Memorial Prize in economics to a psychologist, Daniel Kahneman. Bestselling books were launched, most notably by Kahneman himself (Thinking, Fast and Slow, 2011) and by his friend Richard Thaler, co-author of Nudge (2008). Behavioural economics seems far more exciting than the ordinary sort, too: when last years Nobel was shared three ways, it was the behavioral economist Robert Shiller who grabbed all the headlines.
The Centre for Public Policy and competitiveness
The Centre for Public Policy and competitiveness at Strathmore Business School was set up in 2011 in context of Kenya and New Constitution to act as an avenue for generating and channeling Strathmore Business Schools research output to society and to the economy.
The Centre seeks to promote Interdisciplinary Policy Research, documentation of generated knowledge, translation and dissemination of research finding to society and building a community of thinkers through its student body. The Centre for Public Policy and Competitiveness (CPPC) offers a unique learning experience that prepares executives to effect even more significant and long-lasting change in the society particularly through applied research through the Master in Public Policy and Management (MPPM) and various Executive Education Programs The Centre has collaborative research agenda with the Institute for Strategy and Competitiveness at the Harvard Business School and other notable research institutions both regional and international.
The Busara Center for Behavioural Economics
The Busara Center provides behavioral economics research and consulting services to public, private, and non-profit organizations operating in the developing world. We believe that a better understanding of behavior, coupled with innovative and tailored behavioral solutions, can help organizations to overcome challenges and increase their effectiveness.
To view the event’s pictures, click here.