In our free workshops for council teams looking to explore how behavioural innovation can help to bring about the change they want to see in their areas, one aspect we look at is the use of incentives. For our latest blog, Behavioural Scientist, Lara Suraci shares her best practice principles (and pitfalls to watch out for) when it comes to understanding what motivates people to engage in a trial or adapt the way they shop, recycle, travel or use council services.
Designing effective behavioural interventions is both an art and a science: human behaviour is complex and notoriously difficult to predict, let alone alter. For local authorities, the challenge is even greater due to tight budgets, regulatory limitations, and public scrutiny. Unlike the private sector, large-scale trials and generous reward schemes are rarely, if ever, on the table – not to mention the risk of eroding public trust if an intervention is perceived as patronising or unfair.
Balancing impact, cost-effectiveness and fairness, while staying within the bounds of regulation, is certainly no easy feat. However, local authorities don’t just face unique challenges – they also have unique opportunities to enact real, lasting change in local communities and beyond, and the toolkit for behavioural interventions is richer than often assumed.
Choosing the right incentive structure is critical for the success of an intervention. While this isn’t a complete guide to incentive design, the following five principles offer a solid foundation for crafting incentives that stick, whether you’re starting from scratch or tweaking an existing intervention.
Think beyond money: When we think of incentives, the first thing that comes to mind is often cash or a voucher. However, monetary incentives are sometimes neither feasible nor the most promising option: social incentives like reputational gains, reciprocity, recognition, or a sense of community can be just as powerful.
Numerous studies show that people care about their self-image as well as how others perceive them; appealing to these concerns can thus increase adherence to societal norms such as regular handwashing or correct waste disposal, as well as motivate prosocial actions like blood donations or reducing energy consumption.
Research on reciprocity further suggests that people are more likely to help out others when they have been helped themselves – successful examples of this include time-banking schemes or rent discounts for community contributions in social housing.
Focus on fairness: It's essential to distinguish between equality and equity, and to carefully consider their implications for the fairness of an intervention. While it's often instinctive to aim for equality – that is, offering the same incentive to everyone – this approach can unintentionally produce inequitable outcomes.
If an incentive is more attractive or the desired behaviour change is more accessible to those who are already advantaged, we may end up inadvertently widening existing disparities. Instead, we should prioritise equity in outcomes, which may mean tailoring incentives to the needs of different groups.
We can further enhance fairness by actively encouraging co-design practices: by working with communities to shape what incentives are meaningful to them, we limit the risk of incorrect assumptions, increase legitimacy, and build trust.
Time it right: Behavioural science shows us that when an intervention is delivered can be just as important as what it offers: in other words, timing matters. Incentives are far more effective when they are immediate, visible, and personally relevant.
When access to a reward is delayed or involves friction – such as long waits or having to fill out complex forms – the perceived link between action and outcome weakens, reducing the likelihood of sustained behaviour change. Likewise, certain times of year like the New Year, the start of spring, as well as personally meaningful dates such as birthdays can serve as a fresh start: these periods are associated with increased openness to change and can therefore enhance the effectiveness of incentives.
Beware backfires: Unfortunately, poorly designed incentives can do more than just fall flat: they can actively backfire. Incentives might unintentionally undermine intrinsic motivation, encourage people to game the system or shift the focus from long-term goals to short-term wins.
Take ‘moral licensing’ – a phenomenon in which good behaviour in one context is used to justify bad behaviour in another. This can happen when interventions highlight average behaviour in their appeal for change; for instance, residents who find out that their energy usage is below the community average might feel entitled to continue driving to work rather than consider taking their bike because they feel as though they have already done their part.
That’s why it’s essential to carefully trial and refine your design before going live. Piloting an intervention with a small group, looking for potential loopholes, and seeking feedback from key groups can help uncover unintended consequences early on and ensure that our incentive structure actively promotes the right behaviours.
Test and tweak: The best interventions are dynamic. Circumstances, behaviours, and communities change – and so should our incentives. Economic pressures, social norms, and even how people perceive fairness can evolve over time, meaning a previously effective approach might start to miss the mark or feel out of touch.
Establishing a culture of testing, learning, and adjusting is essential for long-term, sustainable behaviour change. Building in mechanisms for regular feedback and iteration helps ensure that interventions stay relevant, responsive, and impactful as the world around them continues to change.
Ultimately, effective incentivisation is a tricky business and these five principles won’t solve every challenge. They do, however, offer a pragmatic, evidence-based foundation for driving lasting change through interventions that centre fairness while keeping behavioural realities in mind.
If you’re keen to learn more about DG Cities’ behavioural innovation approach to improving public service delivery, we offer a free 90-minute tailored workshop for public sector teams – sign up here!
Further Reading
Handbooks & Toolkits
Behavioural Insights Team. (2014). EAST: Four simple ways to apply behavioural insights.
Organisation for Economic Co-operation and Development (OECD). (2017). Tools and ethics for applied behavioural insights. OECD Publishing.
Cabinet Office & Behavioural Insights Team. (2010). MINDSPACE: Influencing behaviour through public policy. The Behavioural Insights Team.
Academic Publications
Cialdini, R. B., & Goldstein, N. J. (2004). Social influence: Compliance and conformity. Annu. Rev. Psychol., 55(1), 591-621.
Merritt, A. C., Effron, D. A., & Monin, B. (2010). Moral self‐licensing: When being good frees us to be bad. Social and personality psychology compass, 4(5), 344-357.
Truelove, H. B., Carrico, A. R., Weber, E. U., Raimi, K. T., & Vandenbergh, M. P. (2014). Positive and negative spillover of pro-environmental behavior: an integrative review and theoretical framework. Global Environmental Change, 29, 127-138.
Sunstein, C. R. (2016). The ethics of influence: Government in the age of behavioral science. Cambridge University Press.
DellaVigna, S., & Pope, D. (2018). What motivates effort? Evidence and expert forecasts. The Review of Economic Studies, 85(2), 1029-1069.