Inter-American Development Bank
facebook
twitter
youtube
linkedin
instagram
Abierto al públicoBeyond BordersCaribbean Development TrendsCiudades SosteniblesEnergía para el FuturoEnfoque EducaciónFactor TrabajoGente SaludableGestión fiscalGobernarteIdeas MatterIdeas que CuentanIdeaçãoImpactoIndustrias CreativasLa Maleta AbiertaMoviliblogMás Allá de las FronterasNegocios SosteniblesPrimeros PasosPuntos sobre la iSeguridad CiudadanaSostenibilidadVolvamos a la fuente¿Y si hablamos de igualdad?Home
Citizen Security and Justice Creative Industries Development Effectiveness Early Childhood Development Education Energy Envirnment. Climate Change and Safeguards Fiscal policy and management Gender and Diversity Health Labor and pensions Open Knowledge Public management Science, Technology and Innovation  Trade and Regional Integration Urban Development and Housing Water and Sanitation
  • Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Ideas Matter

  • HOME
  • CATEGORIES
    • Behavioral Economics
    • Environment and Climate Change
    • Macroeconomics and Finance
    • Microeconomics and Competitiveness
    • Politics and Institutions
    • Social Issues
  • Authors
  • Spanish

What Behavioral Economics Can Do for the G20

September 12, 2018 by Ana María Rojas Leave a Comment


If you are reading this blog, you are most likely a person with limited rationality. If you doubt that, ask yourself, if you have ever over-snoozed your morning alarm or eaten beyond your point of hunger? Humans, as it turns out, often fail to act in their best self-interest. We fail to follow through on intended goals and undervalue, or discount, the importance of the future.  We take mental shortcuts, instinctively overgeneralizing from events and believing in patterns that don’t exist. In short, we often make judgments and solve problems in ways that are harmful to our long-term welfare.

Because these behaviors usually do not correspond to standard predictions from economic models, economists and psychologists have integrated findings from their two disciplines to increase our understanding of economic decisions. Armed with the tools and insights that psychology offers, behavioral economists now evaluate ways of modifying our beliefs to correct some of our tendencies, or biases, and get us to make choices that maximize our wellbeing.

Advising world leaders on behavioral economics

The IDB has not been foreign to the developments in the field and has understood for many years now the importance of including behavioral insights in its projects and policy designs. On Sept 17, it will further those efforts by bringing together top behavioral economists from around the world to a forum entitled “The Age of Behavioral Economics: Perspectives for the G20” that will be looking at a broad range of behavioral interventions, especially those that are relevant to the Agenda of the G20. The forum, taking place in Buenos Aires, is part of the Think 20 (T20), which brings together leading think tanks, government officials, and representatives from international organizations to develop policy recommendations to G20 world leaders who will meet in the Argentine capital at the end of 2018.

The IDB together with the Institute for the Integration of Latin America and the Caribbean (INTAL) will also be hosting a seminar on Sept 17 entitled “Empujoncitos para Mejorar Vidas” (Nudging to Improve Lives) as part of the effort to encourage policymakers and non-governmental organizations to use behavioral insights.

A Considerable Experience in Behavioral Interventions

The IDB brings vast experience to the table. For nearly a decade,  it has been partnering with local and national governments in Latin America and the Caribbean to advance knowledge related to individual and collective decision-making in the region. Our goal is to address people’s biases to help them make wiser choices, and  we have been working towards that goal in areas ranging from education and savings to health, tax compliance, and labor markets.

In Chile, for example, we have helped less advantaged children by exposing them to information on financial aid for higher education and the financial returns of various professional careers. That, in turn, helped correct information biases that they held which led them to believe that they had to choose less ambitious  careers.

Meanwhile we’ve encouraged people to make better savings and retirement choices. In Brazil, we’ve sent booklets in the mail to nudge  self-employed workers to increase their social security payments so that they will have adequate pensions upon retirement.  We also are experimenting with different methods, including letters, text messages, and in-person visits to increase social security contributions and voluntary savings in Chile and Colombia.

One of our most important endeavors has been helping governments in the region increase voluntary tax compliance. That has involved in Colombia using different methods ranging from letters to in-person visits to convince delinquent taxpayers to pay their tax debts, and, in Argentina, sending letters to explain exactly how much compound interest is charged on late tax payments, an intervention that has been particularly effective in getting delinquent taxpayers to meet their obligations.

We’ve also used a range of behavioral intervention to increase pre-natal visits of low-income women in Guatemala and Peru and vaccination rates among young children in Guatemala.

Continuing efforts to improve decision-making

We will continue to explore ways to use behavioral interventions to improve policymaking and citizen welfare in Latin America and the Caribbean, and we are confident that our considerable experience will be an asset as some of the world’s leading experts in the field gather in Buenos Aires to advise G20 leaders and encourage the use of behavioral economics in the region. Register here and join us!


Filed Under: Behavioral Economics, Microeconomics and Competitiveness, Social Issues Tagged With: #BehavioralEconomics, #G20, #LatAm, #nudge, #T20Argentina, #Taxes, #Vaccinations

Ana María Rojas

Ana María Rojas Méndez is a senior research fellow in Behavioral Economics in the Research Department. She received a Master in Public Administration in 2018 from the John F. Kennedy School of Government at Harvard University. She holds a Master and a Bachelor’s degree in Economics from Universidad de los Andes in Bogotá, Colombia. At the IDB, Ana María supports governments across the region in designing, implementing, and evaluating public policies through behavioral economics.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Follow Us

Subscribe

Search

Related posts

  • Cass Sunstein on Misconceptions, Biases and How Latin America Can Harness Behavioral Economics
  • Compiling Latin America and the Caribbean’s Largest Repository of Behavioral Interventions
  • New Research Opportunities at the IDB for Behavioral Economists
  • Leveraging Behavioral Insights in the Aftermath of COVID-19
  • Inviting Creative Thinkers to Our Free Online Behavioral Economics Course

About this blog

The blog of the IDB's Research Department shares ideas that matter on public policy and development in Latin America and the Caribbean.

Footer

Banco Interamericano de Desarrollo
facebook
twitter
youtube
youtube
youtube

    Blog posts written by Bank employees:

    Copyright © Inter-American Development Bank ("IDB"). This work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives. (CC-IGO 3.0 BY-NC-ND) license and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC- IGO license. Note that link provided above includes additional terms and conditions of the license.


    For blogs written by external parties:

    For questions concerning copyright for authors that are not IADB employees please complete the contact form for this blog.

    The opinions expressed in this blog are those of the authors and do not necessarily reflect the views of the IDB, its Board of Directors, or the countries they represent.

    Attribution: in addition to giving attribution to the respective author and copyright owner, as appropriate, we would appreciate if you could include a link that remits back the IDB Blogs website.



    Privacy Policy

    Copyright © 2025 · Magazine Pro on Genesis Framework · WordPress · Log in

    Banco Interamericano de Desarrollo

    Aviso Legal

    Las opiniones expresadas en estos blogs son las de los autores y no necesariamente reflejan las opiniones del Banco Interamericano de Desarrollo, sus directivas, la Asamblea de Gobernadores o sus países miembros.

    facebook
    twitter
    youtube
    This site uses cookies to optimize functionality and give you the best possible experience. If you continue to navigate this website beyond this page, cookies will be placed on your browser.
    To learn more about cookies, click here
    X
    Manage consent

    Privacy Overview

    This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
    Necessary
    Always Enabled
    Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
    Non-necessary
    Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
    SAVE & ACCEPT