Mar 11, 2022
Today I am very excited to
introduce you to Karina Montes and Mario Drago to discuss their
work with BE OEFA in Peru. These are the first guests on the show
from South America, and I am so excited to start having a
more international presence in the guests coming up this year.
Thank you to Carlos Hoyos, a listener of the show and LinkedIn
connection for the suggestion and introduction. If you or someone
you know is doing some cool work in behavioral economics in a
country that isn't yet well represented in the space, reach out to
me on LinkedIn or through email. I would love to see if it is a fit
to feature on the show just like Karina and Mario's work with BE
OEFA is the environmental
regulatory agency in Peru, sort of like the EPA here in the United
States, and BE OEFA is a (now award-winning!) team Karina started a
few years ago to help incorporate behavioral economics into their
work with some amazing results, as you will hear about in today's
- [00:42] Today I am very excited
to introduce you to Karina Montes and Mario Drago working with BE
OEFA in Peru. These are the first guests on the show from South
- [01:42] OEFA is the
environmental regulatory agency in Peru. BE OEFA is a team Karina
started a few years ago to help include behavioral economics into
their work with some amazing results.
- [04:23] Karina shares about
herself and her background. She is an economist at
- [04:51] Mario shares about
himself and his background. He is an external consultant and
- [06:03] Karina shares the story
of reforms that started in 2016.
- [08:26] When people weren’t
doing what they “should” even though it was the law, they realized
they needed to know more about the irrational part of the
- [10:16] Mario’s relationship
with behavioral economics was kind of an
- [11:21] Mario’s team was trying
to investigate why the public policies were not working. They
discovered all the rational measures and economic incentives were
- [14:08] Mario was the coach for
Karina’s team. Each group worked with one problem, analyzed the
behavior of interest groups, set objectives, and assigned the
- [16:27] Sometimes you have to
think in another way to promote compliance.
- [17:42] They identified five
projects they thought could be solved with behavioral
- [20:18] The five projects
seemed very irrational because they thought that the way to solve
the problem was easy.
- [21:02] BE OEFA was created to
be an experimental nudge unit.
- [23:42] They formed a group
with people that were very motivated and already knew about the
topic. Hundreds of people completed the test and 30 people were
selected for the first group.
- [25:01] Mario shares the
process he went through to design the projects.
- [26:09] The first step was to
determine who they wanted to nudge. Then, after identifying the
true problems they began the experiments, which lasted 3-12
- [29:05] They found something
similar in every case. It is always best to understand the problem
before investigating the best nudges to use.
- [30:54] The best nudges are
incredibly simple (in hindsight) and obviously work, but they often
take a long time to figure out in practice.
- [32:17] So much time has to be
spent on developing and thinking about who you are talking to, what
they are doing, and what mindset they are in.
- [34:09] In the experiment about
liability acknowledgment, the problem was that there was a very low
rate of companies that acknowledged liability responsibility after
the analysis process began.
- [36:55] In the academic
research you can find, a 3-4% increase is often a beautiful
outcome. Their applied research had a much more significant impact
– from 1.4% compliance to over 30%!
- [37:49] You don’t only have to
provide the information. You have to make sure they understand it,
internalize it and get part of their mental process in the right
moment with the right incentive.
- [39:28] Karina’s tip: having
lots of good data is key.
- [42:12] It is important to be
sure of the problem that needs to be solved.
- [43:54] If you are interested
in behavioral sciences, there is a lot of space to work in the
public sector. If you want to have a career in behavioral economics
you can also have public agencies as a client.
- [45:28] You have to have
information and data.
- [44:48] Melina shares her
- [46:30] There is a whole
community of people who love behavioral economics from around the
world waiting to network and connect with you. It is great to have
like-minded people to connect with.
- [47:41] If you enjoy the
experience I’ve provided here for you, will you share about it?
That could mean leaving a rating/review or sharing the episode with
a friend (or 10!)
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