Using Behavioral Science in Public Finance

Using Behavioral Science for Better Decision-Making

Applications for Public Finance and Local Government

Behavioral scientists study how we – human beings – naturally interact with each other and our environment, in ways that impact our preferences, decisions, and behaviors. As part of our Rethinking Budgeting Initiative, GFOA has teamed with BehavioralSight to provide an inside look into the psychology shaping budgeting and finance decisions as well as how you can use this knowledge to design better processes and achieve better outcomes for your organization and the community.

Designing for the Decision-Making Environment

Rather than thinking through decisions rationally and comprehensively, people use a variety of mental shortcuts to make decisions. Oftentimes, these shortcuts are harmless and even helpful. But sometimes they backfire. Find out how to plan mitigations for known biases and improve your ability to structure budget decisions for your organization.

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Of Narratives and Numbers

Psychological research shows that people often grossly misunderstand and/or misuse numbers in favor of their preferred narrative. Finance officers can fall prey to the same pitfalls as less numerate people. If we better understand the relationship between narratives and numbers, then we can structure decisions more wisely.

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The Myth of the Neutral Finance Officer

A popular conception of the public finance officer is as a neutral arbiter, perhaps like an umpire in a baseball game who calls balls and strikes. However, because the finance officer has a decisive role in architecting the decision-making environment by virtue of what information is presented and how it is presented, he or she cannot be perfectly neutral.

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E-Learning Opportunity

GFOA hosted a series of popular webinars titled “Using Behavioral Science for Better Decision-Making.” If you missed the webinars you can sign up to watch the recordings through GFOA's Learning Management System.

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Using Behavioral Science for Better Decision-Making

"One of the best GFOA trainings I’ve ever participated in"

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Using Behavioral Science for Better Decision-Making

“Two thumbs up. It’d be more, if I had more thumbs.”

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GFOA's Rethinking Budgeting Initiative is exploring ways to challenge the status quo with local government budgeting. While not the first attempt by GFOA to improve budgeting practices, this project has the goal of ensuring governments promote sustainable organizations, direct limited resources to solve current challenges, and work to improve outcomes for the community.

GFOA "Test Kitchen" for New Ideas

This community is for all the GFOA member “chefs” who are interested in developing and testing new ideas and practices. Together, we expect to challenge the status quo, breakdown myths, cultivate and refine raw thoughts, and move beyond “this is the way we’ve always done it” to begin thinking about how to evolve public finance for the future.  

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