This chapter offers some suggestions on how reciprocity might be used to justify specific policy directions. For instance, so long as salaries remain the predominant form of remuneration for public sector employees, performance incentives – both positive and negative – might be beneficial so long as all parties accept that the chosen indicators of good and bad performance are appropriate and deem the corresponding performance-related compensation/penalties as fair. Moreover, insofar as reciprocity is entwined with reputational concerns, a reputational model of governance that threatens to punish bad absolute performance and that supports the implementation of good practice is recommended. Relatedly, group selection theory implies that providing the conditions for reputational competition across regions in relation to public sector services may incentivise cooperation and more innovation within each region, generating lessons that could be shared across regions. Furthermore, given that people naturally reciprocate, framing messages with this fundamental motivational force is worthy of consideration when trying to secure individual behaviour change.

This chapter reviews the predominant normative direction in the relatively new field of behavioural public policy - i.e. that we ought to be aiming to improve internalities so as to increase utility. The chapter critiques this approach, and highlights where reciprocity sits in a suggested alternative political economy of behavioural public policy. It is postulated that conditions be created to nurture reciprocal behaviours, to help people to flourish in both meeting the already predetermined broadly defined objectives of public sector services and in relation to their meeting their privately held goals, where they may find fulfilment in any way they wish. In any way they wish, that is, so long as they are not imposing harms on others. The second arm of the proposed framework is that any harms that are consequent on behaviourally informed actions are potentially fair game for regulatory control. So, in short, it is proposed that the political economy of behavioural public policy be focused upon promoting flourishing and curtailing harms.

This chapter focusses principally on considering the different forms of reciprocity, driven variously by purported fairness, liking and/or enlightened self-interest. Reciprocity can be direct (i.e. where exchange partners are known to each other), indirect (i.e. where they are not) and negative (i.e. punishment for transgressions), and there is in general a concern both for the intentions of others and for the final distribution of outcomes. Reciprocity can be all of these things because its expression is contextual – the meaning that people attach to the way the context is framed drives behavioural responses, and if care is not taken reciprocity can be crowded out for what many may perceive as our baser instincts. The contextual nature of reciprocity is illustrated in the chapter with reference to a simple economic abstraction known as the ultimatum game. Ultimately, however, in an evolutionary sense perhaps the most fundamental reason for acting reciprocally is that it can bring about benefits and protection to the group, and most people perhaps know innately that what is good for the group is good for them individually, also.

Reciprocity has roots that predate humans, and is something that is fundamental to the animal kingdom. Much of this behaviour is instinctive (i.e. attitudinal) – e.g. cats licking each other – but these actions may have served as the kernel for the development of more complex, deliberative forms of reciprocity. By common consent, however, although there are some examples of non-human primates and even other species arguably demonstrating a deliberative form of reciprocity and although we have much to learn about animal behaviours, a tendency towards more sophisticated forms of reciprocity that rely on memory and a sense of obligation is predominantly human. Indeed, the human talent for deliberative reciprocity and hence cooperation is an important explanation for why humans have been so successful at populating the planet and dominating other species. This urge to act reciprocally lies very deep within the human psyche. For instance, there is some evidence that very young children show tendencies towards deliberative reciprocity, and demonstrate some concern for a person’s reputation, which is crucial for the effective operation of indirect reciprocity.

Reciprocity, if harnessed in the right way, can serve as a force for good, but it can wither and thus needs to be nourished. This chapter suggests three nutrients. First, reciprocity should be emphasised in the political discourse. If we want social structures that support the basic human motivation to reciprocate and hence cooperate, then how they do so ought to be explained clearly. Second, the decentralisation of more of the management of public services to local planners, purchasers and providers is advisable, partly because securing reciprocal motivations and actions and abating egoistical ones is more difficult the larger the group, partly because this would afford greater local level innovation, which, if good results were shown, could be disseminated cross-regionally, and partly because local level actors will be more in tune with the objectives and priorities of the people they serve. Third, there ought to be policy action on reducing the high concentrations of income and wealth within small percentages of the population, because if one wants people to give and take it makes sense to create conditions where they do not feel that others are merely taking.

This final chapter summarises the arguments and evidence presented in the previous nine chapters - it is thus, in the main, a collection of short summaries of those chapters. The chapter finishes off by contending that the notion that we ought to, and often do, reciprocate is one that most people can accept. It is acknowledged once again that there are many possible dark sides to reciprocity, but that it more often than not serves the better angels of our nature, and in the process generates significant group and, by extension, individual benefits. Consequently, it is advised that policies, institutions, organisations and sectors should be designed to encourage and sustain this most fundamental motivator of human behaviour.

The study of reciprocity has attracted a lot of interest among behavioural economists, at the levels of both theoretical modelling and experimental testing. This chapter reviews briefly the main theories that have been proposed, and their consideration of intentions versus outcomes as drivers of reciprocity. However, most of the chapter reviews the economic games that behavioural economists have used to test reciprocal actions, including the ultimatum, dictator, centipede, trust and public goods games. These games demonstrate again that the extent to which reciprocity is observed and sustained is dependent heavily on context, with repetition of the game, the inclusion or not of the opportunity to punish, anonymity between partners, whether the money on offer is windfall or earned, and a host of other possible factors all having an influence. The evidence on the whole also supports the notion that while intentions certainly matter, for reciprocity to be sustained over an extended period, outcomes matter too.

In the specific design of public policy interventions, reciprocity, somewhat strangely, has until relatively recently been largely overlooked as a key motivator of human behaviour. Rather, the debate on public sector governance and human motivation has tended to focus on the dichotomy of pure altruism and selfish egoism, with the latter generally winning out over recent decades, because the egoism that some have interpreted as being essential to achieve efficiency in the economic exchange has also been embraced by many as applicable to social exchanges. Yet this chapter argues that when we examine the writings of the classical economists we find that over complex goods with much asymmetry of information, the assumption that people either should be or are selfish egoists is not integral to efficient economic exchange, let alone social exchange. The modern supporters of using egoism to inform the design of public policy may contend that this admittedly ever-present aspect of human behaviour can be harnessed to positive ends, but by legitimising egoism we will perhaps crowd out reciprocal altruism, to the detriment of group cooperation.

This chapter reviews some of the many possible harmful consequences of reciprocal actions. For example, people acting reciprocally for mutual interest can sometimes impose harms on third parties. Moreover, strengthening reciprocity and cooperation within a group may intensify their animosity towards outsiders, a possibility that is associated with nationalism, fundamentalism and many other harmful 'isms'. Indeed, there is even the potential for mutually reinforcing cliques to treat others who are ostensibly within the same broader group as outsiders, which may damage the collective. Reciprocal motivations can also be used as an attempt to obligate people against their wishes, which is particularly obnoxious when there are differential power relationships between those involved, and potentially undermines the very notion of a fair exchange. Furthermore, in relation to negative reciprocity, injustice may be felt if it is believed that the punishment is arbitrary or excessive, which can lead to spiralling retaliation and retribution, a spiral that is often very difficult to break.

This chapter aims to consider how deep reciprocity lies in humans, by looking at some of the evidence on how tribal communities live. Although extant tribal communities have invariably been touched by the modern world, they perhaps offer a reasonable approximation of the practices conducted in human hunter-gather societies for tens of thousands of years. Reciprocity – in both its positive and negative forms – is of fundamental importance to the functioning of tribal communities. Here, people reciprocate over almost everything – e.g. through sharing meat, childcare responsibilities, wisdom etc. – and within and between communities, gifts are used to bind and obligate. Moreover, the threat of negative reciprocity discourages the transgression of social norms and attempts to exert power. In tribal communities, it is likely that reciprocity evolved organically for the good of the group, but as societies became larger and more atomised, creating opportunities for people to act on egoistic motivations with less fear of detection, a form of social contract was perhaps needed to nurture and sustain the socially beneficial norm of reciprocity.