Foundations in the US get nudging

By 9 September 2009

An interesting piece in this month’s American Prospect analyses Mayor Bloomberg’s efforts to ‘pay people to do the “right” thing’.

If you’ve not heard of it, since 2007 New York City has been a testing a multi-million dollar programme, Opportunity NYC, that experiments with so-called Conditional Cash Transfers (CCTs). CCTs are cash payments made to people on low incomes in return for specific behaviour—be it opening a bank account, or ensuring that children attend school.

Their proponents say that they are a powerful way of ‘nudging’ people to do things that benefit them. Their critics say they miss out the structural causes of poverty. Early evaluation gives ammunition to both sides. CCTs have improved doctor visits and school attendance, but done less well in promoting employment and improving exam results.

Beyond its immediate impact, the programme is striking to me for a couple of reasons.

First, it is a fairly rare example of policy transfer occurring from developing to developed countries. CCTs were made famous following well evaluated programmes in Mexico and Brazil. Their deployment in America is testament to the value of measuring the impact of social programmes.

Second, it is an example of an unusual kind of private public partnership. The Opportunity NYC programme is wholly funded by foundations and other private sources, and implemented by non-profits. The guys ultimately writing the cheques include the Rockerfeller Foundation, the Robin Hood Foundation, the Open Society Institute and the Stars Foundation. The programme is being administered by a community development organisation. Sad to say, I can’t think of many comparable initiatives on this scale and with this degree of innovation in the UK.