Behavioural Exchange 2015 opening speech

Minister for the Cabinet Office Matt Hancock spoke about how behavioural insights have informed government policy and processes.

It’s a great honour to open this conference.

Ten years ago a conference on behavioural science would have been a much more modest affair. There wouldn’t have been a free lunch. Richard Thaler wouldn’t be signing any autographs. And let’s be honest, there wouldn’t have been much interest from government.

Yet in a remarkably short space of time, this agenda has gone from the seminar table to the Cabinet table of governments around the world.

I think a big catalyst for this was the crash. How did banks, policymakers and mainstream economic theory all fail so badly? It’s a question lots of people in this room have thought hard about.

My own conclusion is that a whole edifice of economic policy was built on the belief that people always behave rationally, on an assumption of how they ought to behave, rather than observations of how they actually do.

And it’s hard to model human behaviour. It’s hard to condense all our quirks and foibles into a neat mathematical formula and then to base a theory on it, so people didn’t bother. But life is hard.

We set up the Behavioural Insights Team in 2010 because we wanted to correct that bias.

It should not be controversial to say we’ve got to base policy on how people really behave. We’ve got to understand the context in which people act: the norms, behaviours and cognitive pressures that govern our decisions.

And the era of fiscal restraint gave a new urgency to this work. With money tight, we had to be sure that our interventions would actually work.

We gave the team an office in the heart of government, reporting to the Cabinet Office and Number 10, because we were intent on taking their findings seriously.

But crucially, the point of the team was not to use its institutional position to tell other parts of government what to do. This was the Nudge Unit, not the Shove Unit. We knew the team had to take people with them, by showing rather than telling often sceptical policymakers how these ideas could help build better services.

And that’s what they began to do.

It started with the now famous tax letters. These showed that people are more likely to respond if you simplify the message and tell them – truly – that the vast majority of people pay on time.

That trial, and variations on it, have now been replicated by colleagues from all over the world. In Australia, with the Government of New South Wales; in Singapore, with the Ministry of Manpower, and in Guatemala, with the World Bank.

I’m delighted that many of the people responsible for that work are here today and I look forward to hearing where they’re heading next.

And while the results are incredibly powerful, the methodology is just as the important as any specific findings.

One of the central insights is that the human mind creates mental shortcuts: stories, cues and rules of thumb to make sense of a complex and uncertain world.

Government behaves like this too. Faced with a difficult policy problem there is always a temptation to stick with the tried and familiar, rather than experiment.

But let’s admit it, we can’t always predict what will work best. So we have to try out variations of a policy, throw out the ones that don’t work and iterate the rest. Policy based on observation rather than prediction, on controlled trials rather than assumption: it’s about applying the rigour of science to the art of government.

After looking first at administrative processes, at the Prime Minister’s request the Behavioural Insights Team has now moved on to more complex areas of policy.

We’ve applied behavioural insights to some of our toughest policy challenges: from supporting people back to work, to making our healthcare system more efficient, to helping improve young adults’ English and maths skills – something I was personally involved in as a minister.

And as well as learning from failure, we can learn from other successes too.

So at this conference you’ll hear from representatives from the White House, the German Chancellery, the European Commission, UNDP and the OECD. I’m grateful to those who’ve flown in from the United States, from Columbia, Brazil and Mexico, from the Finnish Prime Minister’s Office, from Israel, Canada, Austria, Italy and the Gulf.

And we have representatives from across the UK government, including from the behavioural insight teams we’ve established in almost every department, often working in partnership with the BIT itself.

And I’m delighted to welcome an incredible group of academics, again from all over the world. I’d like to highlight and personally thank colleagues from Harvard University, which will be hosting next year’s conference.

And Richard Thaler of course, who’s been a long-time academic advisor to our own Behavioural Insights Team, for which we remain grateful.

When the team first started in 2010, the UK government was seen as a first mover. We’re extremely proud of that but we’re also glad that this has become a global movement. Because the further it spreads, the more data and ideas we have to share, and the more we learn about how to use these insights to inform better public policy.

So thank you for your time, and on behalf of the UK government I want to wish you a successful event and I look forward to hearing your conclusions.

Because ultimately that’s what this is about. Making government work better, to help more citizens lead good and fulfilling lives.