The Devil is in the Details: Policy Design Lessons from Field Experiments in the Pampas

Abstract

There is growing evidence that individual responses to public policies are, to a large extent, mediated by the way the policies are framed, by people's cognitive and computational capabilities, and by people's subjective beliefs. For example, people may react to price changes but not to complicated schemes that rely on people's computational abilities. Similarly, people may react better to simple information such as a picture than to a very detailed analysis of benefits and costs. Henceforth, even very well-intentioned policies may not have the desired impact if they do not take into account people's capabilities and beliefs. This policy paper draws lessons that should help policymakers design more effective public policies by reviewing the evidence coming from recent field experiments and quasiexperiments sponsored by the Inter-American Development Bank.