By Alex Smale
I was sitting in the SCA A100 seminar when the instructor introduced an idea that initially seemed problematic. They suggested strata is the fourth level of government, envisioning government consisted of federal, state, local, and then… strata? Governing involves both the administration and control of a community. There is no doubt strata management involves administration. We prepare budgets, hold elections, and more. Instead, I realized the reason I instinctively had a problem with the idea of strata as government is because we are so limited in how we can exert authority. We have minimal access to forms of coercive power. We do have some ability to take offenders to VCAT, but this only happens in a minority of cases. Despite our lack of coercive power, we manage many societal issues. This includes waste management, vandalism, and more. Owners Corporations therefore need to find other ways to discourage bad behaviour. This essay explains how Owners Corporations can influence behaviour without use of coercive power.
Nudge Theory is a concept from behavioural economics which argues small interventions (or nudges) can have a large impact. These nudges are not dictatorial; they do not involve punishment. Instead, they involve attempts to amend the context within which we make decisions to ‘nudge’ us to good choices. For example, In Chicago, there is a road which has a series of sharp bends. Many drivers ignored the speed limit in these areas. To mitigate this problem, white stripes were painted on the road which get closer together as you reach the most dangerous section. This gives drivers the sensation their speed is increasing, and they slow down. Owners Corporations can implement nudges as they have some control over the environment. For example, during the coronavirus pandemic, some properties placed large x’s on the floor of lifts. The X’s highlight only two people should be in a lift at a time to maintain social distancing. Other examples include planting flowers on nature strips to deter hard rubbish dumping. Green spaces can also improve the health of residents and even reduce aggression. The effect of these small changes on behaviour can be huge and they are often inexpensive to implement.
The state of the environment can also impact behaviour. Broken Windows Theory explains how a poorly maintained environment can communicate messages to individuals. The theory states visible signs of disorder, such as broken windows, encourage further crime. The NYPD popularized the theory in the 90s. One of the major associated efforts was to rid graffiti from the subway system. These actions led to an immense decrease in crime, at the end of the 90s there was a 75% decrease in felonies. This is because a well-maintained environment is a sign the area is monitored and there is a risk of detection for offenders. The environment communicates messages to people and can influence their behaviour. Owners Corporations should have an interest in keeping their properties well maintained. They can also use positive amendments to the environment to amend behaviour. Dumping of rubbish is a common problem. One man in Oakland California got so fed up with people dumping rubbish outside his house, he installed a Buddha statue. The effect was huge, not only did the dumping of rubbish stop, but crime in the area reduced by 82%. This included major crimes such as drug dealing, prostitution, and aggravated assault. While Owners Corporations may not want to go to the extreme of installing religious symbols, they can look at beautifying spaces to send a message bad behaviour will not be tolerated.
Nudges can go beyond changing the physical environment, social influence can also be used to nudge. Even an endemic problem within strata can improve with a nudge: low AGM attendance. In one study academics were trying to measure ways to increase tax compliance. Groups of participants were given one of the below four types of information:
- Their taxes would go to fund good works.
- Threatening descriptions of the punishment for not complying.
- Knowledge of where to go for assistance should they not know how to complete their tax forms.
- Told 90% of people have already complied in full.
Only the last option led to a significant improvement in compliance. When taxpayers are advised compliance is high, they are more likely to comply themselves. Behaviour can be modified by drawing attention to the actions of others because people will act in ways that conform. When communicating to owners, managers should note most responsible owners attend the AGM and not lament low turnout. Managers can apply this concept to other issues as well. For example in notices to residents, managers can note “most residents recycle.” Another social nudge to improve participation in AGMs is simply to ask owners if they are planning on attending. This is known as the “mere-measurement” effect. It refers to the finding when people are asked what they will do, they are more willing to do it. In one study citizens were asked if they intended to vote the day before the election. This increased the probability of that person voting by as much as 25%. Using social influence to nudge is powerful because it appeals to fundamental human psychology, it is also inexpensive to implement.
Owners Corporations have a role in governing societies at a micro-level and have a role in managing societal issues and behaviour. While managers do not have access to coercive power, we do have some control over the context in which choices are made. Nudge theory demonstrates small changes to this environment can have a large impact on behaviour. Changes to the environment can mitigate problems such as hard rubbish dumping and speeding. These changes do not just need to be to the built environment. Social influence can be wielded to nudge because most individuals will conform to group behaviour. Managers can therefore exert social influence by mentioning most residents are behaving well. Even just asking how an individual intends to act can change their behaviour. Finally, the state of the environment holistically can send a message to residents. Run down environments can encourage crime. Conversely, environments that are well maintained send a message bad behaviour will not be tolerated.
This essay was awarded an SCA Vic Pillar Award for Excellence, recognising a person of influence who shares their insight, innovative ideas and knowledge.
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- Johnson, Chip. “Buddha seems to bring tranquillity to Oakland neighborhood.” SF Gate. 2014. https://www.sfgate.com/bayarea/johnson/article/Buddha-seems-to-bring-tranquillity-to-Oakland-5757592.php (accessed June 6, 2020)
- Thaler, Richard and Cass Sunstein. Nudge: Improving Decisions about Health, Wealth, and Happiness. New Haven, Connecticut: Yale University Press, 2008.
- Wilson, James and George Kelling. “Broken Windows: The police and neighborhood safety”, The Atlantic, 1982, https://www.theatlantic.com/magazine/archive/1982/03/broken-windows/304465/.