Edited by Philip Keefer and Carlos Scartascini
- Trust is a tremendous opportunity for countries in Latin America and the Caribbean. By making trust a goal of public policy, and not simply its byproduct, countries can accelerate growth and employment. Decisions to invest, employ, produce, buy, or sell all depend on trust. The most productive, skilled, and innovative individuals have greater economic opportunities in high-trust societies. Greater trust will unleash growth.
- Mistrust in the private sector is an obstacle to inclusive growth. It is well known that the business sector tends to distrust governments, and this hurts investment and productivity. A survey of thousands of export-oriented firms in the region reveals that distrust within firms is also an obstacle to investment and innovation.
- Mistrust in the public sector is an obstacle to inclusive growth. Trust in governments is low in the region. Our study finds that the lack of trust makes it difficult for citizens to demand better public policies and services. A survey of thousands of public officials revealed that mistrust within public agencies, and their mistrust of citizens, reduces public sector capacity to serve citizen needs.
- Restoring trust depends on information and empowerment. Citizens do not trust government when they are uninformed about what government is doing for them, and when they have little capacity to act together to hold government accountable. Firms do not trust each other when they can do little about opportunistic behavior. Governments should inform and empower to restore trust.
Este documento ofrece una guía práctica para el diseño de comunicaciones e intervenciones informadas por la economía del comportamiento con el fin de contener el contagio de la COVID-19. ¿Cómo y con qué materiales hay que comunicar para contrarrestar los profundos sesgos de comportamiento que todos tenemos y que se acentúan en situaciones de estrés, cansancio e incertidumbre? ¿Cómo conseguir que las personas sigan las recomendaciones sanitarias cuando vuelvan a sus lugares de trabajo o estudio? Esta guía ayuda a responder estas preguntas y ofrece claves y ejemplos concretos de cómo las comunicaciones pueden promover un cambio de comportamiento.
(w/ A. Bonvecchi). 2020
(w/ A. Bonvecchi and J. Johannsen). 2015
(w/ Pablo T. Spiller, Ernesto Stein and Mariano Tommasi). Bogotá, Colombia: Mayol Ediciones. 2011.
(Only in Spanish)
(w/Ernesto Stein and Mariano Tommasi). Washington, DC: IDB and DRCLAS, Harvard University. 2010.
(w/Mark Hallerberg and Ernesto Stein). Bogotá, Colombia: Mayol Ediciones. 2009.
(w/ Eduardo Lora). Bogotá, Colombia: Fedesarrollo and Alfaomega. 2009.
(Only in Spanish)
(w/ Pablo T. Spiller, Ernesto Stein and Mariano Tommasi). Washington, DC: IDB and DRCLAS, Harvard University. 2008
"Demand-Side Determinants of Public Spending Allocations: Voter Trust, Risk and Time Preferences" (w/R.Vlaicu and P.Keefer). Journal of Public Economics 206. January 2022.
"A Heavy Hand or a Helping Hand? Information Provision and Citizen Preferences for Anti-Crime Policies" (w/D. Gingerich). Journal of Public Policy. Forthcoming
"How Can We Improve Air Pollution? Try Increasing Trust First" (w/F. Cafferata and B. Hoffmann). Environment and Development Economics. December 2021.
"Partisan Cues and Perceived Risks: The effect of partisan social media frames during the Covid-19 crisis in Mexico" (w/N. Aruguete, E. Calvo, F.Cantú, and T. Ventura). Journal of Elections, Public Opinion & Parties 31(S1): 82-95. June 2021.
"Do You Have COVID-19? How to Increase the Use of Diagnostic and Contact-Tracing Apps" (w/D. Martínez, A.M. Rojas M., C. Parilli, and A. Simpser). PLOS ONE. July 2021.
"Public Good Provision and Property Tax Compliance: Evidence from a Natural Experiment" (w/P.Carrillo and E. Castro). Journal of Public Economics 198. June 2021.
"Let's (not) get together! The role of social norms on social distancing during COVID-19" (w/D.Martinez, C.Parilli, and A.Simpser). PLOS ONE. March 2021.
"Who's calling? The effect of phone calls and personal interaction on tax compliance" (w/M. Mogollón and D. Ortega). International Tax and Public Finance. March 2021.
"Transparency and Trust in Government. Evidence from a Survey Experiment" (w/M. Alessandro, B. Cardinale L., J. Streb, and J. Torrealday). World Development 138. February 2021.
"Fiscal consolidations and electoral outcomes in emerging economies: does the policy mix matter? Macro and micro level evidence from Latin America" (w/M. Ardanaz and M. Hallerberg). European Journal of Political Economy. Volume 64, September 2020.
"Don’t Blame the Messenger. The Delivery Method of a Message Matters" (w/D. Ortega). Journal of Economic Behavior and Organization 170: 286-300. February 2020.
"Compliance Spillovers Across Taxes: The Role of Penalties and Detection" (w/ A.Lopez-Luzuriaga). Journal of Economic Behavior and Organization 164: 518-531. August 2019.
"State Capacity and the Quality of Policies. Revisiting the Relationship Between Openness and the Size of the Government" (w/ M.Franco Chuaire, and M. Tommasi). Economics and Politics. 29(2): 133-156. July 2017.
"Explaining Changes in Tax Burdens in Latin America: DoPolitics Trump Economics?" (w/ M. Hallerberg). European Journal of Political Economy. 48: 162-179. July 2017.
"Tax Reforms in Latin America" (w/D. Focanti and M. Hallerberg). Latin American Research Review51(1): 132-158. 2016.
"On the Institutionalization of Congress(es) in Latin America and Beyond" (w/V. Palanza and M. Tommasi). Legislative Studies Quarterly 41(1): 7-34. February 2016.
"Tax Compliance and Enforcement in the Pampas. Evidence from a Field Experiment" (w/L. Castro). Journal of Economic Behavior and Organization 116: 65–82. August 2015.
"Are We All Playing the Same Game? The Economic Effects of Constitutions Depend on the Degree of Institutionalization" (w/G. Caruso and M. Tommasi) European Journal of Political Economy 38: 212–228.June 2015.
"When Do Governments Improve Fiscal Institutions? Lessons from Financial Crisis and Fiscal Reform in Latin America" (w/M. Hallerberg). Economia 16(1): 41-76. Fall 2015.
"Does Energy Consumption Respond to Price Shocks? Evidence from a Regression-Discontinuity Design"(w/P. Bastos, L. Castro, and J. Cristia). Journal of Industrial Economics 63(2): 249–278, June 2015.
"The Economic Effects of Constitutions: Do Budget Institutions Make Forms of Government More Alike?"(w/M. Ardanaz). Constitutional Political Economy 25(3): 301-329. September 2014.
"Veto Players and Policy Adaptability. An Intertemporal Perspective"(w/E. Stein and M. Tommasi). Journal of Theoretical Politics 26(2): 222–248. April 2014.
"The Presidency and the Executive Branch in Latin America: What We Know and What We Need to Know" (w/A. Bonvecchi). Latin American Politics and Society 56 (1):144–165. Spring 2014.
“Inequality and Personal Income Taxation: The Origins and Effects of Legislative Malapportionment” (w/M. Ardanaz). Comparative Political Studies 46(12): 1636- 1663. December 2013.
“Political Institutions, Intertemporal Cooperation, and the Quality of Policies” (w/E. Stein and M. Tommasi). Journal of Applied Economics 16(1): 1- 32. May 2013.
“The Making of Policy: Institutionalized or Not?” (w/M. Tommasi). American Journal of Political Science56(4): 787-801. October 2012.
“The Politics of Financial Development: The Role of Interest Groups and Government Capabilities” (w/O. Becerra, and E. Cavallo). Journal of Banking and Finance 36(3): 626–643. March 2012.
“Political Institutions and Street Protests in Latin America” (w/F. Machado and M. Tommasi). Journal of Conflict Resolution 55(3): 340-365. June 2011.
Trust, Populism, and the Quality of Government" (w/P. Keefer and R.Vlaicu), in The Handbook of Quality of Government. Oxford University Press. 2021
"The Size and Composition of Government Spending in Multi-Party Systems" (w/W.M.Crain), in Hall and Khoo (eds), Essays on Government Growth: Political Institutions, Evolving Markets, and Technology, Springer. 2021
“Whom do we trust? The role of inequality and perceptions“ (w/J. Valle L.), in Busso and Messina (eds), The Inequality Crisis: Latin America and the Caribbean at the Crossroads. Washington, DC: Inter-American Development Bank. September 2020
"Trust to Advance Inclusive Growth" (w/P. Keefer, AM. Rojas M, y J. Valle L.) in Nuguer, V., and A. Powell, coords. Inclusion in Times of Covid-19. Washington, DC: Inter-American Development Bank. August 2020
"¿Nacional o Importado? Preferencias y decisiones de compra en Argentina" (w/V. Giarrizzo), El Nuevo Factor del Comercio. Inter-American Development Bank. 2019
"La Moral Tributaria. Una brújula para alentar el pago de impuestos", El Nuevo Factor del Comercio. Inter-American Development Bank. 2019
"Con la Mirada en los Sesgos. El BID y la implementación de políticas públicas", in El Nuevo Factor del Comercio. Inter-American Development Bank. 2019
"Programas de Deporte", in El Futuro ya Está Aquí Inter-American Development Bank. October 2019
"Do Particularistic Institutions Lead to Inefficient Policies? Evidence from Taxation in Latin America" (w/M. Hallerberg), in The Political Economy of Taxation in Latin America. Cambridge University Press. June 2019
"Shortchanging the Future: The Short-Term Bias of Politics" (w/P. Keefer and R. Vlaicu), in Izquierdo, A., C. Pessino, and G. Vuletin (eds.)
Better Spending for Better Lives. Washington, DC: Inter-American Development Bank. September 2018
“El análisis de redes sociales y la política social en América Latina (W/A. Bonvecchi, J. Johannsen, and N. Morales) in ¿Quiénes Deciden la Política Social? Economía política de programas sociales en América Latina, Bonvecchi et al. (eds). Washington, DC: Inter-American Development Bank. 2015.
“La economía política de las políticas públicas” in ¿Quiénes Deciden la Política Social? Economía política de programas sociales en América Latina, Bonvecchi et al. (eds). Washington, DC: Inter-American Development Bank. 2015.
“La economía política de la política social: de las instituciones a las redes sociales” (W/A. Bonvecchi) in ¿Quiénes Deciden la Política Social? Economía política de programas sociales en América Latina, Bonvecchi et al. (eds). Washington, DC: Inter-American Development Bank. 2015.
“Institucionalización de las instituciones políticas y su impacto sobre las políticas públicas” (w/M. Tommasi) in Nuevo Institucionalismo: Gobernanza, Economía y Políticas Públicas, X. C. Arias and G. Caballero (eds.) Madrid, Spain: Centro de Investigaciones Sociológicas. 2013
“Economic Crisis, Bureaucratic Capacity, and Fiscal Reforms in Europe and Latin America” (w/M. Hallerberg) Forthcoming. European Commission.
“The Politics of Taxation” (w/F. Machado and E. Stein) in A. Corbacho, V. Fretes and E. Lora (eds.) More than Revenue. Taxation as a Development Tool. New York, NY: Palgrave Macmillan. 2013.
“How (Not) to Produce Effective Policies? Institutions and Policymaking in Latin America” (w/Mariano Tommasi) in The Oxford Handbook of Latin American Political Economy. Oxford: Oxford University Press. 2012.
“El presupuesto por resultados en América Latina: un análisis de economía política de sus determinantes” (w/G. Filc) in Reforma fiscal en América Latina. ¿Qué fiscalidad para qué desarrollo? Santiago, Chile: CEPAL and CIDOB. 2012. Pp 145-192
“How (Not) to Produce Effective Policies? Institutions and Policymaking in Latin America” (w/Mariano Tommasi) in The Oxford Handbook of Latin American Political Economy. Oxford: Oxford University Press. 2012.
“Political Institutions, Policymaking, and Economic Policy in Latin America” (w/Martín Ardanaz and Mariano Tommasi) in The Oxford Handbook of Latin American Economics. Oxford: Oxford University Press. 2011.
“¿Cómo se juega en America Latina? Instituciones políticas, procesos de negociación y políticas públicas” (w/ Pablo T. Spiller, Ernesto Stein y Mariano Tommasi) in El Juego Político en América Latina: ¿Cómo se deciden las políticas públicas? Bogotá, Colombia: Mayol Ediciones. 2010.
“¿Quién es quién en el juego político? Describiendo a los actores que intervienen, y sus incentivos y funciones” in El Juego Político en América Latina: ¿Cómo se deciden las políticas públicas?. Bogotá, Colombia: Mayol Ediciones. 2010.
“Political Institutions, Actors, and Arenas in Latin American Policymaking” (w/Ernesto Stein and Mariano Tommasi) in How Democracy Works. Political Institutions, Actors, and Arenas in Latin American Policymaking. Washington, DC: IDB and DRCLAS, Harvard University. 2010.
“The Politics of Productivity” (w/Mariano Tommasi) in The Age of Productivity: Transforming Economies from the Bottom Up. Palgrave Macmillan. 2010.
“Una Cuestion de Enfoque” (w/Eduardo Lora) in Consecuencias Imprevistas de la Constitución de 1991: La Influencia de la Política en las Políticas Económicas. Bogotá, Colombia: Alfaomega. 2009.
“A New Framework” (w/Ernesto Stein) in Who Decides the Budget? A Political Economy Analysis of the Budget Process in Latin America. Washington, DC: IDB and DRCLAS, Harvard University. 2009.
“The Budget Process as a Political Arena” (w/Mark Hallerberg and Ernesto Stein) in Who Decides the Budget? A Political Economy Analysis of the Budget Process in Latin America. Washington, DC: IDB and DRCLAS, Harvard University. 2009.
“The People’s Choice? The Role of Opinions in the Policymaking Process” in Beyond Facts: Understanding Quality of Life. Washington, DC: IDB and DRCLAS, Harvard University. 2008.
“Who’s Who in the Policymaking Process: An Overview of Actors, Incentives, and the Roles they Play” in Policymaking in Latin America: How Politics Shapes Policies. Washington, DC: IDB and DRCLAS, Harvard University. 2008.
“Budget Institutions” (w/Gabriel Filc), in The State of State Reform in Latin America, Eduardo Lora (ed.). Stanford University Press. 2007.
“Decentralization, Budget Processes, and Feedback Effects” (w/Gabriel Filc and Ernesto Stein), in The Politics of Policies. Harvard University Press. 2006.
"The Database of Political Institutions 2020 (DPI2020)" (w/ C. Cruz and P. Keefer). IDB-DT-56. Washington, DC: Inter-American Development Bank. 2021.
"The Database of Political Institutions 2017 (DPI2017)" (w/ C. Cruz and P. Keefer). - IDB-DT-4.Washington, DC: Inter-American Development Bank.2018.
"The Database of Political Institutions 2015 (DPI2015)" (w/ C. Cruz and P. Keefer). - IDB Database No. 121.Washington, DC: Inter-American Development Bank.2016.
"Political Institutions, State Capabilities, and Public Policy: An International Dataset -2013 Update-" (w/ M.Franco Chuaire, H. Berkman, D. Focanti, E. Stein, and M. Tommasi). IDB Database No. 112.Washington, DC: Inter-American Development Bank. 2013.
"Tax Reforms in Latin America in an Era of Democracy. A Database" (w/D. Focanti and M. Hallerberg). IDB Database No. 111.Washington, DC: Inter-American Development Bank. 2013.
"Medium-Term Frameworks and the Budgetary Process in Latin America. A Database" (w/ G. Filc). IDB Database No. 014.Washington, DC: Inter- American Development Bank. 2010.
"Politics, Policies, and Productivity: An International Dataset" (w/ A. Mecikovsky, and M. Tommasi). IDB Database No. 013.Washington, DC: Inter-American Development Bank. 2010.
"Political Institutions, State Capabilities, and Public Policy: An International Dataset" (w/ H. Berkman, E. Stein, and M. Tommasi). IDB Database No. 012.Washington, DC: Inter-American Development Bank. 2009.
Curso Economía del Comportamiento
Mensaje de Bienvenida al curso Economia del Comportamiento
Behavioral Economics: How Latin Americans can better plan for the future
How can behavioral psychology and economics improve the decisions we make in areas such as health, savings, and infrastructure investment?
What is behavioral science?
Carlos Scartascini from the Inter-American Development Bank responds to three questions about behavioral economics:
Behavioral Economics - Facebook Live (in Spanish)
¿Qué tiene que ver la psicología con políticas públicas para manejar desafíos como la corrupción, el ahorro, la congestión urbana o la obesidad? Entérate en esta conversación sobre la economía del comportamiento entre el Presidente del BID, Luis Alberto Moreno; Carlos Scartascini, economista principal del Departamento de Investigación del Banco; y Florencia López Boo, especialista senior de la División de Salud y Protección Social.
Information and citizen behavior: Public policies for better decisions. Citizens are often busy, stressed and they don´t have time or the tools to make take the right decisions. That's why the information you provide to them, how clear and concise it is, and how you distribute it can be important in determining how they behave. The IDB has conducted several interventions in which it offered clear information to citizens so they could make better decisions. We are working on environmental issues, providing information on pollution, on issues of citizen safety and the relationship with the police, and on conservation of resources like drinking water. In all cases, we seek to increase confidence in the State and greater demand for public policies with long-term benefits. At the IDB we are committed to continue designing and supporting public policies that improve the lives of Latin Americans.
Is the method governments use to communicate with its citizens relevant? This video summarizes the results of an intervention that evaluates the responses that taxpayers have to different communication methods: letters, email, phone calls, and personal visits. Results show that each method has a different effect. Governments have to take into account these results and evaluate which method is more efficient for each particular policy it’s pursuing. This intervention is another example of the work the IDB is pursuing for strengthening governments in their ability to use behavioral economy lessons for improving the lives of their citizens.
|Premios para el pago de impuestos|
Can Rewards Change Behavior? Ideas to increase tax compliance in Latin America.
Ideas that increases tax collection.
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For democracy to function and economies prosper, people need to believe that their fellow citizens are trustworthy: that they are well intentioned, will honor commitments and will not take advantage of them. When people have little to no information about others, it is difficult to believe that. The fact that Latin America and the Caribbean […]
The post Employing Information to Boost Citizen Trust and Welfare appeared first on Ideas Matter.
How do people make decisions? How does behavior affect public policies? And can policymakers nudge people into doing things that will benefit them and society at large? Many issues related to the success of public policies come down to a, sometimes understudied, factor: human behavior. In our Behavioral Economics for Better Public Policies course, we […]
The post The Free Online Behavioral Economics Course Is Going Strong. Have You Taken It? appeared first on Ideas Matter.
The government says it is progressing in its fight against the COVID-19 pandemic, but firms distrust the news, delaying investments and hiring and slowing economic recovery. A firm manager distrusts her own employees and refuses to delegate responsibilities, complicating efforts to invest, innovate and move into new markets. Citizens distrust firms and demand excessive regulation, […]
The post When the Lack of Trust Cripples Productivity and Growth appeared first on Ideas Matter.
It would always get a laugh from readers of Peanuts. Lucy would hold the football for Charlie Brown to kick. Then she would pull it back at the last minute and send him flying onto his back. The gag, repeated over and over throughout the years, was funny because of Charlie’s absurdly trusting behavior. Having […]
The post Building Trust for Social Cohesion and Growth in Latin America and the Caribbean appeared first on Ideas Matter.
While the COVID-19 pandemic has killed almost five million, more people die every year because of air pollution, which accounts for about one in five deaths worldwide. The problem, moreover, is especially acute in low- and middle-income countries, where exposure to high levels of air pollution affects 90 percent of the population. Given the substantial […]
The post Trust: A Critical Component of the Fight Against Air Pollution appeared first on Ideas Matter.
Trust and a sense of citizenship are the pillars of thriving democracies. They are essential to the willingness of citizens to make individual sacrifices in pursuit of collective endeavors that drive a society’s success. Unfortunately, that trust and sense of citizenship have been at historical lows worldwide recently and have been declining even more rapidly […]
Although only 9% of the world’s population lives in Latin America and the Caribbean, the region accounts for a third of the world’s homicides. The cost of crime and violence in our region is very high: crime takes large numbers of lives, affects people’s safety and welfare, and hampers economic development. As evidence of this, one […]
Telemedicine—the delivery of medical services through electronic means of communication—is potentially transformative, mitigating transportation problems, bringing care to rural communities and decreasing waiting times and medical costs. But its adoption in Latin America has been slow. Insufficient communication infrastructure and status quo biases, among other factors, have hampered its use. Regulation has not caught up. […]
With 9% of the world’s population and 33% of its homicides, Latin America and the Caribbean suffers from far too much violence. But government responses, heavily focused on punitive practices like mass incarceration, have fallen short. While incarceration has increased by 76% over the last decade, the region as a whole still has more than […]
The post Changing Public Attitudes to Combat a Crime Epidemic appeared first on Ideas Matter.
Lack of trust between individuals and between individuals and institutions is a chronic problem in Latin America and Caribbean and often linked to inequality. After all, in a region that ranks among the most unequal in the world, it is natural to distrust political elites who seem to coopt government and ensure that policies favor […]
The post How Perceptions of Inequality Affect Trust in Latin America and the Caribbean appeared first on Ideas Matter.
Since the COVID-19 pandemic began more than a year ago, much has been learned about how infection can be prevented. In particular, the scientific consensus holds that certain human behaviors, like social distancing, the avoidance of indoor gatherings, and the use of face masks, are powerful and effective at helping prevent the virus’s spread. Nonetheless, many people continue to meet with friends indoors, participate in social events, and walk about without masks. All this has helped propagate the […]
The COVID-19 pandemic is dramatically affecting the lives of hundreds of millions of people in Latin America and the Caribbean, taking lives and exacting an immense toll on individual and national economies. Governments have responded with urgent assistance. But with a more than 10% decline in revenues as a result of closed businesses and lost […]
The post Don’t Forget to Call: How Personal Interaction Boosts Tax Payments appeared first on Ideas Matter.
In a year when political institutions around the world were tested and pushed to their limits, understanding institutions and institutional features has become more important than ever. The rise of populism, increasing economic inequality, and the emergence of racial and other protests in the U.S. and globally—all against the backdrop of a deadly pandemic—have prompted a reexamining of political institutions and a […]
The post For a Region in Turmoil, An Updated Database of Political Institutions appeared first on Ideas Matter.
Covid-19 is still spreading rapidly on a global level, with more than 11.4 million cases and 407,000 deaths in Latin America and the Caribbean alone as of early November. This is happening despite the imposition of strict mobility restrictions and other constraints, like mask wearing and school closings. Indeed, in Argentina, with some of the […]
Latin America has achieved significant social progress in recent decades. From the 1990s through 2019, poverty fell by almost 50 percent: mortality in children under five was cut by more than half; and primary school education became nearly universal. But while significant investment was made to accomplish those outcomes, much more could have been achieved […]
The post Using Social Network Analysis to Identify Decision-Makers and Improve Public Policy appeared first on Ideas Matter.
With about 1.4 million people—including pre-trial detainees and convicts—held in penal institutions, Latin America is suffering from a dramatic incarceration crisis. Over the last ten years, the prison population in the region has grown by 76%, and today 241 people for every 100,000 in habitants are in detention, about twice the level of the European […]
As Latin America and the Caribbean confronts one of the most severe economic downturns in its history, policymakers are looking ahead to what they must do in terms of fiscal and monetary policies to restore growth once the Covid-19 crisis passes. But one element that desperately needs more attention is the deep and chronic lack […]
The health news from Latin America is not good. The region has become the global epicenter of the Covid-19 epidemic, with nearly 4 million infections and 204,000 deaths as of mid-June. Moreover, the numbers are rising rapidly in several countries, including Brazil, which lags only the United States in reported cases, Peru with the seventh […]
The post Behavioral Economics and the Urgent Need to Use Masks When Lockdowns Are Lifted appeared first on Ideas Matter.
As the Covid-19 pandemic takes its toll in lives lost and economic hardship, governments in Latin America and the Caribbean have rushed to increase fiscal spending, even as revenues drop. But only some countries will be able to access markets and borrow without sacrificing sustainability in the aftermath of the pandemic. Most will have to […]
The post Leveraging Behavioral Insights in the Aftermath of COVID-19 appeared first on Ideas Matter.
The number of people infected with the novel coronavirus has surpassed 5 million worldwide. However, a significant number of countries are entering a new phase in the fight against SARS-COV-2, as the virus that causes the Covid-19 illness is known. As can be seen from the following maps prepared using data from Oxford University, restrictions […]
The post COVID-19: We Must Use Behavioral Science to Communicate Better during the Delicate Reopening Period appeared first on Ideas Matter.
The pandemic caused by the novel coronavirus (SARS-CoV-2) continues to severely impact countries around the world. More than 4.5 million people have been confirmed infected, and the death count is now in the hundreds of thousands, although stringent restrictions on mobility have prevented a greater public health disaster. However, economic stagnation and fatigue among the […]
Over the last few months, most Latin American and Caribbean countries have been able to flatten the curve of infections thanks to severe restrictions on mobility. The Human Mobility Map for Latin America and the Caribbean shows that the restrictions have worked and citizens are limiting their movements. Argentina saw a decline of almost 54% […]
The post How Can Behavioral Economics Improve Our Decision-Making during the Pandemic? appeared first on Ideas Matter.
In responding to the Covid-19 pandemic, not all countries have implemented equally strict policies. While Spain and most countries in Latin America and the Caribbean have chosen to mandate lockdowns by law, including using security forces for monitoring, control, and coercion, in other countries—such as Sweden—decisions regarding confinement and social distancing have been left up […]
The post Institutional Capacity and Trust: The Ingredients for Fewer Restrictions during the Pandemic appeared first on Ideas Matter.
With thousands of deaths worldwide, the coronavirus has spread panic in nearly all countries and territories where it has hit. People fear not only infection and death, but upheavals to their daily lives, rituals, and traditions. Everything from earning an income to having a normal family life or even putting food on the table has […]
The post In the Fight Against the Coronavirus, Behavioral Economics is a Potent Weapon appeared first on Ideas Matter.
Hundreds of thousands of protesters have poured into the streets in recent weeks from Chile and Colombia to Lebanon and Iraq. Transport hubs have been destroyed, stores looted, and government institutions attacked. Dozens have been killed. The immediate causes of the protests have been diverse, ranging from price hikes to rumored changes in laws affecting rights […]
As if we couldn’t think for ourselves when it comes to pouring hot liquids down our throats, the warnings about hot tea and coffee are ubiquitous. “Caution Handle with Care I’m Hot,” says one cup. “Caution Contents Hot,” says another, with variations on the theme repeated in thousands of restaurants and cafes around the world. Businesses, it […]
A Latin American president faces a steep economic downturn. She introduces fiscal austerity measures, perhaps a tax hike, to try to contain the damage. Mass protests erupt, police clash with demonstrators, and the political mood grows darker by the day. Can the president and her party survive? The short answer is usually no. In a […]
Latin America needs to increase its rate of tax collection. With budgets tight and capital spending meager, the region can’t tolerate rates of evasion for personal and corporate income taxes of up to 50% in many countries. Moreover, in a region already very unequal, tax evasion tends to increase inequality. But the challenges of improving […]
The post The Pros and Cons of Simplified Tax Notices and Amnesties appeared first on Ideas Matter.
Trust is rare in Latin America, and only getting rarer. Economic and financial mismanagement, corruption scandals, and inequality have taken their toll. According to Latinóbarometro, an annual public opinion survey of 18 countries from the region, trust in government dropped from 45% in 2009 to 22% in 2018, and the share of people who are discontent […]
The post Can Government Commitments Win Back Citizens’ Trust in Latin America? appeared first on Ideas Matter.
When it comes to crime, we are easily swayed by false perceptions and information. We lose our wallet to a pickpocket or hear about a mugging in our generally safe neighborhood and immediately assume that we are in the midst of a crime epidemic. We are pushed to anxiety by politicians who peddle exaggerated homicide […]
The post When Anti-Crime Strategies Reflect Ignorance Rather than Knowledge appeared first on Ideas Matter.
Can interventions from behavioral economics get people to pay their taxes? It is a question of the greatest urgency in Latin America and the Caribbean where evasion of personal and corporate income taxes reaches as high as 50% in many countries, with significant impact on their scope of options. The short answer is that behavioral interventions […]
The post Behavioral Interventions on One Tax Can Boost Compliance Across the Board appeared first on Ideas Matter.
I recently attended the IlleXBehavior Meeting in Chicago, a gathering of behavioral and tech consultancies and some of the largest companies in the United States. The meeting focuses on the latest insights from behavioral economics and neuroscience, and I must admit I was a bit skeptical at first. I half-expected the meeting to be a […]
The post A Walk on the Dark Side: Learning from Corporate Use of Behavioral Economics appeared first on Ideas Matter.
Go into any bar or restaurant in Latin America during the World Cup and you’ll witness ecstatic fist pumps, shouts and hugs after a goal by the national team. Sports makes for tribal celebration, and the shared experience that occurs when the tribe excels and triumphs can bond even strangers and serve as a powerful […]
The post Sports Programs Can Boost Solidarity and Strengthen Societies appeared first on Ideas Matter.
Soccer fans throughout Latin America will be glued to their televisions in June and July, basking in the excitement and pride that come with belonging to a region famed for its brilliance at the World Cup. But it’s not just about elite athletes. Since at least the days of the ancient Greeks, societies have understood […]
The year 2017 may be the year behavioral economics found its place in the sun. Fifteen years after behavioral economics pioneer Daniel Kahneman won his Nobel Prize, its principles have been transformed into key policy tools in government, business, and development agencies. The 2017 Nobel Prize to Richard Thaler, one of its principle theoreticians and […]
The post Nudging Latin Americans to Healthier, More Prosperous Lives appeared first on Ideas Matter.
The voters of the United States will ultimately weigh in on the wisdom of the large $1.5 trillion tax cuts headed for a final vote before the end of the year in the U.S. Congress. They will make it clear in the November 2018 legislative elections whether they believe that steep reductions in corporate taxes […]
Caribbean countries still face a delicate fiscal situation. While a number of Caribbean economies have reduced their debt burden, the majority face high sovereign debt levels that weigh on their prospects for strong and sustainable growth. In the context of weak fiscal stances and high dependence on foreign external conditions, it makes sense to implement […]
“Nothing can be said to be certain, except death and taxes,” said the United States’ Benjamin Franklin. And few things are less pleasurably anticipated. But at least when it comes to taxes, the avoidance can make running a government especially hard. Behavioral economics, with its psychological insights into how information can be used to change citizens’ […]
Richard Thaler, the University of Chicago professor who fused psychological insights and economics to reveal how biases affect decision-making, was awarded Oct. 8 the 2017 Nobel Prize in economics. The award, which recognizes Thaler’s work in overturning assumptions about economic behavior as rational and demonstrating how people could be “nudged” to make better choices, brings […]
In the wake of its banking and economic crisis of 2002, Uruguay took some bold steps. Unlike other countries that squandered the commodities boom of the subsequent years, delaying fiscal reforms and, in many cases, worsening their long-term fiscal stance, the country embarked on a series of integral reforms in virtually every policy area, from […]
The post Should Reform Tackle Rules and Institutions Together? appeared first on Ideas Matter.
In the early 2000s, the Research Department of the IDB embarked on a deep exploration of policymaking in Latin America. What made countries in the region veer from state-controlled to market-centered policies? Why did they fail to reach their development goals and why did international aid assistance often come up short in helping them? The […]
What are the best ways to get people to change their behavior for their own, and society’s, good? Seeking to avoid coercion, policymakers increasingly turn to pricing strategies, like “sin taxes” on alcohol or cigarettes. Or they resort to techniques from behavioral economics like “nudges,” which employ peer pressure, moral appeals and suggestive images—such as […]
Residents of Hamburg, Germany may have been shocked by the violent protests that erupted July 6 and July 7 during the meeting of the G-20, as protesters armed with rocks and incendiary devices blockaded streets, set cars ablaze and battled with police officers. But for the inhabitants of many Latin American cities, such scenes are […]
When the clock strikes midnight on December 31, it’s very common to start going over one’s New Year’s resolutions, like doing more exercise, eating healthier food or giving up bad habits. And it’s equally common to forget those resolutions only a couple weeks later. For that reason, sometimes an incentive needs to be added to […]
Government capacity is in part the ability to hit the long ball, to have long-term policies that look beyond the next election and the next change in administration. In economic policy, as in social policy and so many other areas, it can make all the difference. Unfortunately, in too many countries of Latin America and […]
Since its founding in 2004, Facebook has boasted of its mission to “make the world more open and connected.” And with nearly 2 billion users, including more than 230 million in Latin America, it has in many ways earned boasting rights. Facebook is today the world’s dominant social media site for people sharing personal and […]
The post Moving Out of the Social Media Bubble to a More Robust Democracy appeared first on Ideas Matter.
In March 1990, some 2 million Colombians cast a symbolic vote during elections demanding a new constitution. The vote followed a harrowing year of guerrilla, paramilitary and drug trafficking violence. Three presidential candidates had been assassinated, and many people argued that only a new national charter, creating a more inclusive, representative and decentralized government, could […]
Public information campaigns are a complex, delicate undertaking. Getting them right is crucial, as undoing the damage of misinformation is very difficult: once perceptions have been formed, it’s very hard to modify behavior. And when it comes to vaccination —an issue that has sparked controversy over the years and became news again this week— the repercussions […]
The post Public Information on Vaccines Can Be a Matter of Life and Death appeared first on Ideas Matter.
Would you save more if 10% of your paycheck was automatically deposited into a separate account in your name? Would you feel more obliged to pay your taxes if you knew all the neighbors on your block had paid them? And would you use the hand dryer instead of a paper towel in a public […]
Since the late 1980s, numerous Latin American countries have ushered in sweeping new constitutions to forge more inclusive, representative and just societies. In some places, like Brazil and Argentina, these constitutions have helped turn the page on the past and complete the transition from dictatorship to democracy. In others, like Colombia, they have targeted sources […]
The post Chile’s Constitutional Reform: IDB Seminar Aims to Get It Right appeared first on Ideas Matter.