Regulatory reform

Behavioural economics


Behavioural economics is the study of economic decision making and activity. Why do people make certain actions and how do they act in certain situations? This can range from the selection of product brands, to big decisions such as understanding why some people have health insurance, pensions and make health decisions. 

Understanding this behaviour can help governments and regulators design policies in such a way that citizens make better decisions and actions for themselves.

In the past five years, behavioural economics has been rapidly propelled from the margins of economic policy analysis towards the policy mainstream. Its increased application is helping countries across the world to regulate better based on actual, and not assumed, behaviour.


The use of behavioural economics by governments and regulators is a growing trend globally, most notably in the United Kingdom and United States but more recently in Australia, Canada, Columbia, Denmark, Germany, Israel, Netherlands, New Zealand, Norway, Singapore, South Africa, Turkey and the European Union.

Examples of behavioural economics in action:


Behavioural Economics




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Mr. Faisal Naru,
Senior Economic Adviser,
Regulatory Policy Division,
Directorate for Public Governance and Territorial Development