Top of the Class

One of the topics covered by the authors of Poor Economics in their chapter on education was how to "nudge" families to send their children to school. Governments in developing countries offered conditional cash transfers to families if they sent their children to school. The results were outstanding, with secondary school enrollment increasing from 67% to about 75% for girls, and from 73% to about 77% for boys.

The Economist published a great article last March on the use of behavioral economics in public policy. In one experiment researchers painted footsteps on the ground in patterns that went past trash cans. The result was a reduction in littering by 46%. If governments can effectively harness the uses of behavioral economics, it could certainly lead to better economic outcomes.