Policy Beats Morality

byDavidmanheim3mo17th Oct 201813 comments


(Crossposted from Medium)

This is a simple point, but one that gets overlooked, so I think it deserves a clear statement. Morality is less effective than incentives at changing behavior, and most of the time, policy is the way incentives get changed.

Telling people the right thing to do doesn’t work. Even if they believe you, or understand what you are saying, most people will not change their behavior simply because it’s the right thing to do. What works better is changing the incentives. If this is done right, people who won’t do the right thing on their own often support the change, and their behavior will follow.

I remember reading a story that I think was about Martin Gardner’s column (Edit:it was Douglas Hofstadter's - thanks gjm!) in Scientific American in which he asked eminent scientists to write in whether they would cooperate with someone described as being “as intelligent as themselves” in a one-shot prisoner’s dilemma. He was disappointed to find that even many of the smartest people in the world were rational, instead of superrational. Despite his assertion that intelligent enough people should agree that superrationality leads to better outcomes for everyone, those people followed their incentives, and everyone defected. Perhaps we can chalk this up to their lack of awareness of newer variants of decision theory, but the simpler explanation is that morality is a weak tool, and people know it. The beneficial nature of the “morality” of non-defection wasn’t enough to convince participants that anyone would go along.

Environmentalists spent decades attempting “moral suasion” as a way to get people to recycle. It didn’t work. What worked was curb-side pickup of recycling that made money for municipalities, paired with fines for putting recyclables in the regular garbage. Unsurprisingly, incentives matter. This is well understood, but often ignored. When people are told the way to curb pollution is to eat less meat or drive less, they don’t listen. The reason their behavior doesn’t change isn’t because it’s “really” the fault of companies, it’s because morality doesn’t change behavior much — but policy will.

The reason politics is even related to policy is because politicians like being able to actually change public behavior. The effectiveness of policy in changing behavior is the secondary reason why — after donations by Intuit and H&R Block — congress will never simplify the tax code. To paraphrase / disagree with Scott Alexander, “Society Is Fixed, Policy Is Mutable.” Public policy can change the incentives in a way that makes otherwise impossible improvements turn into defaults. Punishment mechanisms are (at least sometimes) sufficient to induce cooperation among free-riders.

Policy doesn’t change culture directly, but it certainly changes behaviors and outcomes. So I’ll say it again: policy beats morality.

*) Yes, technological change and innovation can ALSO drive changes in incentives, but predicting the direction of such changes is really hard. This is why I’m skeptical that innovation alone is a good target for changing systems. Even when technology lowers the cost of recycling, it’s rarely clear beforehand whether new technology will in fact manage to prompt such changes — electric trolleys were a better technology than early cars, but they lost. Electric cars are still rare. Nuclear power is the lowest carbon alternative, but it’s been regulated into inefficiency.