“Surprising and not surprising,” she said. “Not surprising that people were not perfectly honest, but equally surprising that people were not maximally dishonest.”
The study aimed to find “what drives people to behave more honestly”. In a randomised controlled trial, subjects rolled dice and self-reported the result. The higher they rolled, the more they would get as a cash reward. Then, two variables were introduced to see if they would impact honest reporting.
Adding a “lottery” element to see whether it increased overreporting had no effect.
But the second variable, allowing participants to choose whether their roll would be monitored, had a big impact. In that instance, 85 per cent of subjects opted in, and behaved more honestly than those who rolled the dice in private.
The findings are even more relevant in a world with falling trust in public institutions, concerns about election interference, perceived rising corruption, and other risks to society.
Why honesty matters in public policy
Professor Leong said, “The obvious motivation for public value is to help people to become honest,” and as the study points out, society depends on honest behaviour — everything from returning a lost item to declaring one’s health and vaccination status. “But this imperative to be honest can conflict with self-interest.”
The study points out that dishonest tax evasion robs governments of billions in revenue and, in the US, fraudulent Covid-19 claims racked up billions more in unnecessary costs.
What governments have tried so far
Policymakers have implemented many different strategies to increase honest outcomes. In the UK, researchers experimented with normative messaging or ‘nudges’ to see if they could boost the number of people paying their back taxes. They sent out reminder letters. Some with messages to the effect of, ‘X per cent of people in your [country/postal code/town] pay their taxes on time’. Invoking these local norms had a positive effect. In fact, the closer to home the reference (i.e., town instead of county), the higher the increase in repayments — up to 15 per cent.
The US Environmental Protection Agency’s Audit Policy incentivises companies to ‘self-police’ and report any environmental violations. It does this by offering lower civil penalties and by taking criminal charges off the table. This was shown to have increased technical compliance, although the environmental benefits are open to debate.
Policy ideas in the real world
Professor Leong said that there are many challenges when designing policies, no matter how well-intentioned. Referring to a behavioural study she conducted, which asked if smart water meters in the shower help to save water, she said, “The answer is yes; it does help you to save water. However, there is a negative spillover — you save water in the shower and use more water in the rest of the household.”
The spillover amounted to almost one-third of the savings, or “two steps forward, one step back”. She said this finding can spur policymakers to consider the spillover effect in their planning, “Smart meters are useful, but not as useful as you think.”
According to Professor Leong, the study on how to induce honesty is ultimately tied to its value to government. “I was looking for a simple, cheap way to help people become more honest,” and the results show this intervention can do just that.
But can the dice roll experiment transition to people’s real-world lives, or is it too abstract?
Professor Leong believes it can. “It's a clean, abstract case, but the fact is, it’s real money — it's not fake — it's real self-interest.”
With that in mind, how do academics make sure their ideas — such as the effectiveness of opt-in monitoring — make an impact in the real world?
Professor Leong replied, “My answer is: in every possible way we can. I'm going to present this at a behavioural public policy conference, and we make it open access to any policymaker.” She also stressed the importance of publishing op-eds in plain language to disseminate the message.
The next step towards implementation would be for a government agency to perform a small pilot programme to “see how that lands.”
Beyond public policy, the honesty study has implications in the private sector as well, which may be faster at adopting new information. A human resources site has already cited the paper as providing a practical way to encourage honest behaviour without being punitive.
“In fact, the private sector is really at the forefront of behavioural science,” said Professor Leong, “You only have to walk into a supermarket to see how sophisticated their thinking is. Also, to behave honestly in a large organisation is so important. If you have a simple intervention like opt-in monitoring, it would be so useful to do it.”
This article was written and contributed by David Austin.