How would environmental regulation be different if our
regulators were up to date on current research in psychology and
neuroscience? A leading American legal scholar and member of the
Obama Administration, Cass Sunstein, published a detailed analysis in
the University of Chicago Law Review.
His bottom line? Small, inexpensive policy initiatives can
have large and highly beneficial effects, especially through
disclosure requirements, default rules, and simplification. And
it's essential to look beyond purely material incentives:
...while material incentives (including price and
anticipated health effects) greatly matter, outcomes are
independently influenced by (1) the social environment and
(2) prevailing social norms.
It is an academic paper, and can be hard slogging, but the
conclusions are worth attention:
"While disclosure of information is an
important regulatory tool, steps must be taken to ensure that
disclosure will be not merely technically accurate but also
meaningful and helpful. Such steps require careful attention to how
people process and use information.
It is important to distinguish between summary disclosure,
typically provided at the point of purchase, and full disclosure,
typically provided on the Internet. Summary disclosure should be
clear, simple, and salient, and it should emphasize factors that
actually matter to people (such as the annual dollar value of fuel
economy or energy efficient choices).
Full disclosure should provide information that can be used in
multiple ways, thus improving the operation of markets. Often the
most important uses come from the private sector, which may promote
comparison shopping among multiple options. Some noteworthy recent
efforts allow people to see the nature and effects of their own
past choices and to understand the likely effects of different
choices in the future. In all cases, disclosure is most useful if
it informs people of what, precisely, they might do in order to
avoid significant risks or obtain significant benefits.
Default rules can greatly affect social
outcomes, and in some circumstances, sensible defaults can serve as
a complement or alternative to mandates and bans. One of the
advantages of wellchosen default rules is that they can simplify
and ease choices—for example, by producing automatic
enrollment in programs that are generally beneficial while also
allowing people to opt out. A potential problem is that those who
design default rules may not know which rule is best and one size
may not fit all. At least when the relevant group is diverse and
the domain is familiar, active choosing is likely to be preferable
to default rules.
Because complexity can often have undesirable or unintended side
effects—including high costs, noncompliance with law, and
reduced participation in useful
programs—simplification may well help to
promote regulatory goals. Indeed, simplification can often have
surprisingly large effects. Reduced paperwork and form-filling
burdens (as, for example, through fewer questions, use of skip
patterns, electronic filing, and prepopulation) can produce
significant benefits. It may also be desirable to ease
participation in both private and public programs by increasing
convenience and by giving people clearer signals about what,
exactly, they are required to do. People are far more likely to
respond when certain facts, risks, or possibilities are salient;
effective warnings take account of this fact.
Finally, regulation can work in concert with social
norms, helping to promote agreed-upon public goals and to
increase compliance with legal requirements.
Public–private partnerships, enlisting the initiative and
the creativity of the private sector, can be especially helpful in
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