This is an interesting column from David Brooks in the NYT, mostly because he sees many of the main challenges in public policy as a matter of better psychology.
What about the big problems? How do we get people to restrain government commitments now so that debt down the road won’t be so ruinous? How do we calculate the multiplier effects of tax cuts or spending increases among different subgroups of the population, or under different emotional conditions? How do we rig the context of budget negotiations so participants can actually come to a deal? How are people in different cultures likely to react to drone strikes? How do we structure sanctions against Iran to cause the greatest psychic humiliation?
These are the big questions, and most of our policies rely on crude folk psychology from a few politicians. But there’s hope. As Brian Wansink notes in Eldar Shafir’s volume, the 20th century saw great gains in sanitation and public health. The 21st century could be a great period for behavior change.
No mention of economics at all. Of course, economics has some things to say about credibility and commitment, such as the Kydland/Presscott time inconsistency literature. But the rational actor approach appears to be yielding diminishing returns. The focus of the social sciences can shift over time. I've been seeing more and more interesting things in psychology recently.