Policy Beats Morality

(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.