As India continues to integrate behavioural tools to complement traditional policy approaches, it can create a resilient and effective public health system that addresses challenges for humans
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The 21st century is governed by economic theories built on assumptions that do not always reflect reality. One such assumption is that of the Homo economicus—a perfectly rational individual who always maximises utility. While Rational Choice Theory presumes all individuals to be homo economicus, humans are only partly rational. Behavioural economics, a subset of behavioural science, is an interdisciplinary field that draws from psychology, neuroscience, anthropology, sociology and political science, among others, focusing primarily on decision-making and the impact of psychological factors on economic behaviour.
In a complicated, fast-paced world, instinctive decisions using heuristics (rules of thumb) and mental models (shaped by socioeconomic and cultural influences) that have evolved over centuries aid faster decision-making, reducing cognitive load. Simultaneously, however, the lack of deliberate thinking often leads to systematically sub-optimal decisions. By incorporating psychological models in economic frameworks, development challenges can be better addressed.
Behavioural economics, a subset of behavioural science, is an interdisciplinary field that draws from psychology, neuroscience, anthropology, sociology and political science, among others, focusing primarily on decision-making and the impact of psychological factors on economic behaviour.
Recognising human limitations, behavioural scientists use “nudges,” which Nobel laureate Richard Thaler, defines as subtle changes in choice architecture (the context in which individuals make decisions) that alter behaviour predictably without restricting choice or significantly changing economic incentives. In Chicago, painting white stripes progressively closer together on roads approaching sharp turns created an illusion of speeding, reducing accidents by 36 percent. Brazil leveraged soap operas with strong female leads to boost women’s education leading to an 11 percent decline in fertility, demonstrating the potential of small, cost-effective changes to address complex challenges where traditional interventions fail.
We are all surrounded by nudges—intentional or unintentional. By leveraging them, policies can be improved for societal benefit. Globally, over 600 behavioural insights or “nudge” units have been established in governments, businesses, nonprofits, research centres and multilateral organisations, showcasing their growing relevance in policy development.
In healthcare, the most challenging issues are often behavioural rather than medical, such as inadequate uptake of preventative care and indulging in high-risk behaviours like tobacco consumption—explained by “Hyperbolic Discounting,” a heuristic, according to which, when choices and results are separated by time, the change in present utility is given more weight compared to the change in future utility. Tailored behaviour-centric policies can serve as a new prescription to current challenges, improving health outcomes.
State BIUs were set up in Bihar and Uttar Pradesh to conduct on-ground research and test behaviourally-designed interventions.
In 2019, NITI Aayog established the Behavioural Insights Unit (BIU) which aims to combat unconducive behaviour through the use of evidence-based solutions, particularly in low-resource settings. Additionally, state BIUs were set up in Bihar and Uttar Pradesh to conduct on-ground research and test behaviourally-designed interventions. Currently, in collaboration with development partners, behavioural insights are being applied to boost the Aspirational Districts Programme in India.
While India has made significant progress on the supply side (i.e., health infrastructure), behavioural constraints from the demand side (i.e., consumers) cause hindrances. For example, despite the provision of free iron-folic acid tablets by the government, their uptake remains low because of mental models of misconceptions and mistrust. In Madhya Pradesh, scratchable calendars were used to encourage pregnant women to take tablets daily, revealing a healthy baby upon adherence. Expectant mothers were also provided with a kit comprising the necessities for new mothers to reduce the cognitive load on them.
In Maharashtra, glitter was used to illustrate the spread of germs when children shook hands, making the concept more salient for them, resulting in observed positive changes in children’s attitudes towards handwashing. During COVID-19, the gaming application Ludo King was used to promote COVID-appropriate behaviour using elements such as “mask mode” and digital advertisements, helping change beliefs relating to mask effectiveness for 27.5 percent of the people and increase in intention to engage in safe COVID behaviours. These interventions represent the wide applicability of behavioural insights across age groups and differing socio-economic contexts, showcasing its immense scope in the Indian context.
With the establishment of the BIUs in India, which is also the first BIU in South Asia, a dual responsibility falls upon it in introducing evidence-based insights not only within mainstream Indian policies but also contributing to the behavioural science community globally. Despite the implementation of some innovative interventions, gaps persist. In this regard, some recommendations are discussed below.
Interventions should align with societal norms and values to enhance acceptability and avoid marginalising vulnerable groups.
Behavioural interventions, while cost-effective, raise ethical questions about autonomy and consent. Policymakers must ensure transparency to uphold individual autonomy and safeguard choice. Furthermore, interventions should align with societal norms and values to enhance acceptability and avoid marginalising vulnerable groups. Poorly designed choice architectures may have unintended consequences and risk reinforcing stereotypes or exacerbating inequalities, making inclusivity and cultural sensitivity critical. Sustainability is another challenge. Nudges often lose efficacy over time as their novelty wears off. Rigorous monitoring and evaluation are essential to assess long-term impacts and refine interventions. Ethical frameworks and ongoing research can help strike a balance between effectiveness and ethical responsibility.
In India, the inclusion of behavioural components in Centrally Sponsored Schemes remains limited according to a 2022 evaluation by the BIU. Additionally, a study by the Organization for Economic Co-operation and Development (OECD), involving 60 nudge units from 23 countries, found that behavioural insights are often applied later in the regulatory process to address gaps. Moving forward, by adopting a proactive approach and incorporating behavioural insights during the initial stages of policy development, biases that undermine policy effectiveness can be better targeted.
Within the domain of Indian public health, the centrally funded schemes primarily resort to Information, Education, and Communication strategies with limited fund allocation for behavioural channels. An experiment demonstrated that just providing information for widow pension schemes does not translate to increased applications, and accompanying behaviour change components are key to translating information into action.
Many interventions are restricted to the regional level, indicating a potential for tailored expansion to state and national-level policies.
Moreover, many interventions are restricted to the regional level, indicating a potential for tailored expansion to state and national-level policies. Further, along with Bihar and UP, BIUs should be established in other states as well, considering the cultural diversity in India. Additionally, limited monitoring and evaluation are being conducted. Empirically tested interventions help identify gaps, assess impact in the short and long run, and accordingly scale successful interventions. Furthermore, nudges may not always be ideal, and analyses must be conducted to evaluate their net welfare effect.
While the sectors of Health, Women and Child Development and Rural Development have been increasingly utilising behavioural insights, their application in domains such as social inclusion and labour markets is limited, both of which are social determinants of health. Further, nudges alone cannot resolve all issues. An intervention called “Community-Led Total Sanitation”, which aimed to create a defecation-free community in India and Indonesia in 2007 held public group discussions at sites of open defecation as a “walk of shame” reducing open defecation by 7 percent in Indonesia and 11 percent in India. In India, it was combined with a subsidy for toilet construction, leading to 20 percent more toilets being built compared to Indonesia. This suggests that adequate resources and infrastructure are also essential and behavioural tools must be used as complements rather than substitutes for broader policy measures.
The scope on the supply side also extends to physician behaviour as demonstrated by a study indicating improvement in patient safety and quality of care. A significant issue in India is that the community health workers often feel undervalued. Research suggests that recognition through social cues can boost morale and performance, strengthening social connections and triggering a sense of social approval.
A 2010 Institut Public de Sondage d'Opinion Secteur survey found that the public acceptability of nudges is higher in less wealthy nations, including India; however, support for outright prohibitions on certain behaviours, such as smoking, is high as well. By fully understanding the level of acceptability and consequent experiences for people, policymakers can better assess the value of such interventions.
By learning from countries such as Spain and the US, which have been successfully using behavioural tools to increase organ donations, India can combat such challenges.
To ensure that nudges do not adversely impact welfare by misuse through institutions, outlining laws and guidelines may be beneficial, such as the one by the Reserve Bank of India, requiring authentication for recurring transactions, targeting the default setting of automatic payment renewal, based on the status-quo bias, according to which, individuals tend to go for default options.
Furthermore, by learning from global best practices, India can consider implementing similar policies. In terms of organ donation, for example, India faces a wide gap between demand and donors. By learning from countries such as Spain and the US, which have been successfully using behavioural tools to increase organ donations, India can combat such challenges. Additionally, the promotion of organ donation by Apple, in collaboration with Donate Life America, increasing registrations by over 6 million in the US, displayed the potential of public-private partnerships. Through global collaborations, the sharing of knowledge products and best practices can be facilitated, further advancing research.
In conclusion, while cognitive biases are deeply ingrained, they can be addressed through context-specific behaviour-centric policies. Moving forward, as India continues to integrate behavioural tools to complement traditional policy approaches, it can create a resilient, equitable and effective public health system that addresses challenges for humans, not just homo economicus.
Nimisha Chadha is a Research Assistant at the Observer Research Foundation
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Nimisha Chadha is a Research Assistant with ORF’s Centre for New Economic Diplomacy. She was previously an Associate at PATH (2023) and has a MSc ...
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