In colonial India, free-roaming cobras posed a danger to the public. British government officials hit on the solution: Offer a monetary reward to any local who brings in a dead cobra.

It appeared to work: Many dead snakes were presented, and the reward money was duly given out.

But soon, the government found out that people were breeding cobras to get the reward - and it dutifully ended the programme. Left with worthless cobras, the locals released them into the wild.

The policy had cost a small fortune; and instead of reducing the cobra population, the bounty probably increased it.

Every policy or programme planned can have intended and unintended consequences.

Another example: In America, some states have what is called "three-strikes laws" - where individuals can be given a very severe prison sentence when convicted for a third time, even if the third offence is relatively minor.

Studies showed that instead of being a deterrent, enforcing three-strikes laws led to an increase in violent crime, especially against law enforcement officers.

This was because of an unintended consequence - those who already had prior convictions would fight violently not to be arrested, especially for a third time.

The true stories of cobras and criminals illustrate the fact that policies can lead to outcomes directly opposite to what was intended.

Or they may, at the very least, result in some unexpected drawback even when the intended goal was partially achieved.



ST ILLUSTRATION: MIEL



Take, for example, a social security policy that enforces savings for retirement. Its mandatory nature means the goal is achieved to some extent. But that enforced savings may lead to an inflated sense of security in many who then save and invest less for the long term.

The problem is compounded when the policy has multiple objectives.

In Singapore, people can use Central Provident Fund (CPF) money to fund a property purchase. When they retire, they may not have enough CPF savings to live on in their old age, unless they can convert their property from asset to cash.

One can say that one unintended consequence of liberalising the use of CPF for property purchases is poorer retirement adequacy for CPF members.

Having unintended outcomes does not mean that the policy is flawed or should not be implemented.

The larger point here is that translations from policy intent to content to outcome are often not straightforward.

The outcome may be different from, or opposite to, what was intended. Nor are unintended negative consequences the result of poor planning: They can happen even when policymakers are competent and cautious.

So what are policymakers to do, to try to reduce unintended consequences, and respond to them when they do crop up?

First, dispel the myth that unintended consequences from policies cannot be anticipated.

When unintended consequences arise, it is easy to blame changing and complex circumstances beyond one's control.

Policymakers do indeed operate in an uncertain and complex environment. But unintended consequences can also result from internal factors.

Ensure conditions of experimentation can be realistically replicated

It is possible to anticipate and try to prevent negative outcomes from happening, and help bring about positive ones, even though policymakers do not have full control over them. It is in this spirit of responsibility and rational optimism that we can examine the potential unintended consequences from the policies and plans in Budget 2017, including their design and execution. Take, for example, the plan to create more space for innovation through regulatory sandboxes in various areas, where boundaries are set within which some rules can be suspended. This forward-looking idea is now being applied to financial technology and testing of self-driving vehicles on roads in specific zones. With more regulatory sandboxes to be implemented in different areas, policymakers should ensure that the conditions of the experimentation can be realistically replicated in the target situations to which the experimental results are intended to apply. These include the resources and support provided to facilitate effective functioning in the sandbox. Otherwise, the ostensibly successful findings from a regulatory sandbox that, in fact, is not representative of the real-world situation, will misinform policy decisions on what regulations to retain, revise or remove.

INADEQUATE COORDINATION AND CONFIRMATORY BIAS

In the public policy context, unintended consequences often arise due to some common factors.

One is inadequate coordination across agencies. The public service is organised into distinct agencies, but people's problems and lived experiences are not similarly compartmentalised. So policies need to be developed holistically, rather than in an issue-specific manner, and supported by all agencies so that they cohere.

It is important to refine structures and develop working norms that support whole-of-government approaches. This means identifying and addressing the barriers to information sharing and collaboration.

These could be bureaucratic procedures, work processes, decision-making authority, incentive system, fear of errors, organisational cynicism, and conflicting needs of the agencies, sectors or stakeholders involved.

Unintended consequences may also be traced to human cognitive biases that policymakers are not immune to. The most widespread is the tendency to seek out, interpret and remember information that confirms existing beliefs or actions.

The problem of confirmatory bias gets more severe if the authority structure and dynamics in the policy team encourage groupthink, where members of a highly cohesive group withhold dissenting views to go along with majority opinion.

That is why it is critical for policymakers to have the character, in addition to the competence, for public service. They need moral courage to speak up for what they believe is right, and the practical skills to surface alternative views constructively and effectively.

In this regard, Prime Minister Lee Hsien Loong emphasised, in a recent dialogue, that leaders must not surround themselves with yes-men who paint only a positive picture.

He went on to say leaders should seek out people who can engage in productive disagreement, so that better views can emerge and better decisions can result.

These are important principles that Singapore policymakers should seriously practise.

UNINTENDED, BUT NOT UNANTICIPATED

One key myth about unintended consequences is that they were always unanticipated by the policymakers.

In fact, many unintended consequences of policies were likely anticipated by policymakers, especially in Singapore where policies are typically rolled out only after detailed analyses and robust internal discussions.

Take, for example, Singapore's population policies which had allowed a large and rapid intake of foreigners to meet the needs for labour and economic growth.

They led to unintended consequences of crowding and discontent among Singaporeans.

But policymakers probably had considered and concluded that the trade-off was necessary and justified. The problem was not that policymakers failed to anticipate unintended consequences, but that they underestimated their extent and impact associated with infrastructure, uneven quality of foreigners, foreigner fit in Singapore society and tension in local-foreigner relations.

Two lessons here are worth reflecting on. First, unintended but anticipated negative consequences tend to occur when policymakers approach difficult issues in a zero-sum dichotomous way, seeing the situation as making necessary trade-offs in policy decisions.

Instead of assuming that trade-off is the only approach to adopt, policymakers should think in a more paradoxical manner, to identify approaches that can achieve seemingly opposing goals, especially economic versus social ones, at the same time.

Second, when unintentional consequences that were anticipated but underestimated occur, it is best for policymakers to openly discuss what in fact happened.

This was what Singapore policymakers tried to do in the case of the population problem.

They explained the need for foreigners, acknowledged that the pace of population growth should have been more calibrated and took concrete actions to slow population growth. They also introduced measures to improve infrastructure, address workplace fairness and promote local-foreigner integration. Of course, acknowledging mistakes and explicating policy deliberation processes may carry political cost.

But it is good for policymakers to be explicit to the public about their positions, and transparent about the thought process behind policymaking. It will help prevent erosion of public trust in policymakers' competence, integrity and benevolence.

In sum, unintended negative consequences can be anticipated and minimised, and positive outcomes from policies are likely to occur when policymakers and the public adopt complementary mindsets.

On the part of policymakers, they must continue to seek inputs and remain open to alternative views from different sources, because they do not have a monopoly over wisdom and solutions. On the part of experts, employers, unions and the public, they must be willing to speak up, and persevere in providing honest feedback and constructive perspectives.

When both policymakers and the public learn to see things from the other's perspective, engage each other constructively and build mutual trust, they can co-create truly people-centric policies that are likely to achieve the intended outcomes.

•The writer is director of the Behavioural Sciences Institute, and Lee Kuan Yew Fellow and professor of psychology at the Singapore Management University.