Using opportunity costs to counter “one-shot bias” in policy innovation

Book section

Allocating scarce resources to meet policy objectives incurs opportunity costs. Public servants face an increasingly significant opportunity-cost dilemma between resourcing the incremental adaption of existing systems of service delivery and investing in their replacement through radical but risky innovation. Should a government’s limited time, money, and brainpower be spent on low-risk, low-change adaptation, or on high-risk, high-change innovation? Attitudes among policy-makers towards this question are influenced by cognitive biases. Hindsight bias among voters fosters risk aversion in politicians, leading to incremental adaptation, protecting against policy gambles but forestalling radical change. Conversely, “one-shot bias” among ministers temporarily in positions of influence leads to risk acceptance, greater innovation but increased chance of high-cost failure as leaders strive to use time-limited powers to the full. Either bias can be functional or dysfunctional, depending on circumstances. The downsides of “one-shot” bias are starkly illustrated by three major changes in British public policy since 2010, relating to social security, healthcare, and European Union membership. Future public servants can respond to one-shot bias and the adapt-innovate dilemma by providing impartial advice on ministers’ choice of policy objectives, not simply the means of achieving those objectives. This requires civil service independence, increased trust between the political and administrative classes, and, more radically, enhanced public audit arrangements so that ministers and senior officials are accountable for “benefits forgone” as well as “value-for-money.”

Authors: Elston, T; Bevan, G

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Palgrave Macmillan
• Host title: The Palgrave Handbook of the Public Servant
• Pages: 1665-1684
• Place of publication: Cham, Switzerland
• Publication date: 2021-06-01
• DOI: 10.1007/978-3-030-29980-4_35
• EISBN: 9783030299804
• ISBN: 9783030299798
• Language: English
• Keywords: hindsight bias; cognitive bias; innovation; optimism bias; Brexit; policy change