MPC calls for adopting behavioural insights in government policies

KUALA LUMPUR Malaysia Productivity Corporation (MPC) is calling for government ministries and agencies at federal, state and municipal level as well as regulatory authorities, to adopt behavioural insights (BI) in public services.

MPC Director General Datuk Abdul Latif Abu Seman said that good policy development and implementation involves removing unnecessary regulatory burden.

“This is part of MPC’s agenda for promoting productivity, and BI provides an opportunity and methodology for reducing the administrative cost of regulation and enforcement through nudging behaviours,” he said in a statement.

“BI is a proven tool for enhancing policy outcomes by understanding human behaviour and applying a behavioural ‘pull’ approach besides the regulatory ‘push’ approach. Improving the government’s regulatory delivery through structural reforms will lead to a more competitive and productive economy,” he added.

He said that many countries such as UK, US and the Netherlands, have BI units within government to help guide policies that have on-ground implications for businesses and the public.

“These governments have used nudges to improve road safety, encourage recycling and waste reduction, increase personal savings, and encourage education and reskilling, for example.”

Behavioural insights is an approach that considers human cognition and applies systematic ‘nudges’ to induce behavioural change. It is particularly useful for discouraging negative behaviours and noncompliance towards public wellbeing, without resorting to costly government regulation and enforcement.

Traditionally, governments have relied on economic levers, such as se ing prices, subsidies, penalties and tax to drive policy forward. These levers do not always achieve their intended outcomes, because of conflicting behavioural responses from the public and industry.

Faisal Naru, head of strategic management and coordination at the Organisation for Economic Co-operation and Development (OECD), said that BI is a growing practice among policy practitioners around the world to achieve be er outcomes at a lower cost.

He explained that humans have mental frames and biases that may not fully respond to incentives and penalties of costbased traditional economics. He added that OECD encourages government and public service entities to apply BI in formulating policies and regulation.

Speaking at National Competitiveness Webinar organised by MPC recently, Eddie Razak, senior advisor at Eden Strategy Institute and a student of BI at Harvard Kennedy School, said that policies work best when there are intrinsic motivations overlaying extrinsic regulations.

He added that the current Covid-19 pandemic is a good example where, until vaccines become available, the only way to contain the disease was through behavioural change, such as wearing masks, washing hands and social distancing.

“While the movement control orders and standard operating procedures are necessary, enforcement can be cumbersome. Things work best when people internalise and adopt behavioural change willingly.”

MPC is collaborating with the various ministries and agencies to implement BI Initiatives. Among them are Ministry of Youth and Sports, Ministry of Transport, Perbadanan Tabung Pendidikan Tinggi Nasional and Ministry of Health.