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To Make Better Policies, Should We Focus on Individuals or Systems? Spoiler Alert: It’s Both.

May 20 2022 • 3 min read

Imagine that you are a government health minister who’s been transported back in a time machine to December 2019, when the Covid-19 virus was first identified.

Your challenge is to decide, with all the benefits that hindsight can bring you, how to approach the impending disaster. You can adopt a ‘system-level’ response: shutting down transport systems, locking down the economy, and pumping funding into the development of vaccines. Or you can adopt an ‘individual-level’ response: encouraging people to get tested if they develop symptoms, to get vaccinated when they are called, and to wear masks in certain situations.

Which do you choose?

If you were a minister faced with this choice your answer should be ‘both, of course’. You would know, for example, that a successful vaccine programme requires both an effective vaccine and a population that is generally willing to receive it. And that a successful lockdown programme will be most effective if people voluntarily comply with measures that will effectively slow the spread of the virus.

In other words, you would stress the need for system-level and individual-level responses to support and complement each other.

You might think that this conclusion is relatively uncontroversial.

But a recent paper authored by two of the world’s most prominent behavioural scientists (Nick Chater and George Loewenstein) and cited in a Financial Times article on the subject by Tim Harford (all of whom we much admire) has suggested that individual-level responses are often viewed as an alternative to, or even a wholesale replacement of, system-level responses such as legislation and taxation.

According to Chater and Loewenstein, too much focus on the individual – and not enough focus on the system – has in many cases resulted in inadequate and ineffective policies across several important areas including climate change, obesity, and pensions. They contend that this individual-level focus often results in small-scale interventions that are unlikely to solve the scale of the problems we face.

But there are two central problems with this critique.

The first is that few policymakers really think that small scale ‘nudges’ are likely to solve complex policy challenges. Even Richard Thaler, co-author of Nudge, argues that ‘we have a climate crisis and it cannot be solved just by nudging’. We could make the same point around obesity, poverty, and the cost-of-living crisis.

The second is it is easy to say that ‘system-level’ changes, such as taxation and legislation, are solutions to complex policy problems. But system-level changes like these can take myriad different forms, and their efficacy depends entirely on how well they are designed. And this, ultimately, depends on how people are likely to react to them.

In other words, we need a good understanding of the individual level if we are to design better system-level reforms.

As we highlighted in our hypothetical example, it became very apparent to governments around the world that we needed a systemic response to Covid-19. But it needed to go hand in hand with an understanding of how people were likely to respond.

The same is true in relation to climate change, obesity, poverty, and all other complex policy challenges. Systemic reforms are needed. But they need to be supplemented with an understanding of how we will respond to them. And we need to do more, not less, of this individual-level work if our system-level policy solutions are ultimately going to succeed.

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