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Brexit, a multitude of decision-making case studies

Whether you think Brexit is a good thing or a bad thing, the process so far is a catalogue of spectacularly poor decisions. What can we learn from them?

“Life is journey, not a destination”, a widely misattributed quote goes. The same might be said about the interminable Brexit process. And just like life can be more interesting if it is treated as a journey, so Brexit delivers some interesting observations, in particular regarding some the decisions that were made along the way. Can we draw some lessons from this?

Of course we can. Let us start at the beginning: prime minister David Cameron’s decision to hold the referendum. Was that a good decision? Leavers and Remainers might well give different answers to this question. But the quality of a decision should not really depend on whether one likes the outcome. We must dig a bit deeper, and try to keep an impartial viewpoint.*

Cameron’s choice

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David Cameron — an optimist without skin in the game? (Image: Wikimedia commons)

History shows that David Cameron’s government had none. It had chosen not to develop even an outline plan of what to do if Leave won the referendum. Few people would challenge the idea that, with a considered route from EU membership to non-membership, taking into account the considerable complexity and the wide range of issues that needed resolving, the UK would now not be in the present mess. How could it be that there was no plan?

There are several cognitive and behavioural tendencies which, unchecked, can collectively lead to neglect of one of the possible outcomes. One is unrealistic optimism (also known as optimism bias). If you believe that things will go your way, you are less likely to make plans for the opposite case. David Cameron (who campaigned for Remain) appeared pretty confident Remain would win, bolstered by the negative economic forecasts for the various Brexit scenarios considered at the time. This also hints at a second kind of blind spot: the belief that others, by and large, think like we do, and that what matters to us matters to them too (sometimes called the false consensus effect). If you focus only on what is material to you, you risk becoming oblivious to anything else — until it is too late to do anything about it. The fundamental case for Remain was based on economics, but the Leave side played to the electorate’s emotions with messages around regaining sovereignty and “taking back control” of the UK’s trade, laws and borders, and that ended up gaining the upper hand.

Finally, Mr Cameron had no skin in the game. He manifestly deflected any responsibility for delivering Brexit by promptly announcing, within hours of the result being declared on 24 thJune 2016 that he was going to quit before the autumn: “I do not think it would be right for me to try to be the captain that steers our country to its next destination”. On 11 thJuly, when his successor was known, he (while humming a jolly tune) declared he would resign two days later, leaving Theresa May to come up with a plan. If it doesn’t matter whether you have a plan, why make the effort?

May’s choice

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Theresa May: tough talking and perseverance no match for reality? (Image: Wikimedia commons)

Some momentous decisions may involve principles and convictions, as well as material costs and gains. When you choose to let the former (here in the shape of political ideology) dominate your approach, you run two key risks, especially if you do so without fully grasping the reality within which your principled demands are supposed to be met. The first one is that through such an uncompromising stance, you are overlooking the cost, i.e. what you will need to sacrifice to deliver your principled promises. The second one is that you clash with reality, and there is no possible outcome that meets all your demands.

And that did indeed happen to Mrs May. She discovered that the Good Friday agreement was incompatible with the exit of the Customs Union (CU), and so she was forced to propose the compromise of ‘temporarily’ remaining in the CU as a backstop. She made three consecutive unsuccessful attempts to get sufficient support in parliament for her withdrawal deal. The determination (some might say stubbornness) with which she acted is also not necessarily a strength in decision-making. If your resolve for a certain approach is unconditional, then you risk overcommitting and ultimately — as in Mrs May’s case — heading for failure.

Parliament’s choice

Unfortunately, parliament did not use this opportunity to reflect on what would happen if no deal could be agreed between the EU and the UK, or if such a deal were rejected by the European or the UK parliament individually. Instead, it promptly approved the invocation with a large majority (498 votes to 114 — at the time the Conservatives had 330 seats, so 168 members of the opposition voted in favour as well). But by doing so, they (unwittingly?) transformed “no deal is better than a bad deal” from rhetoric into reality. If there was no approved deal two years after the invocation, the UK would leave the EU without a deal, by legal default.

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Parliament: sin in haste, repent at leisure? (image: Wikimedia commons)

The proverb ‘sin in haste, repent at leisure’ comes to mind (although the parliamentary shenanigans over the last year can hardly be described as leisurely). Had MPs considered this inevitable outcome before approving the invocation, and ensured back then that “no deal” should never be on the table, they would not be in the predicament they find themselves in now. Why didn’t they?

There are a few possible explanations. MPs wanted to just get on with things (a case of action bias), and may have judged that the two years afforded by the Article 50 process were ample to achieve a good exit deal (a case of planning fallacy).

Both of these might have reinforced motivated reasoning, when we actually engage in conscious reasoning, but with our motives and desires unduly influencing the process. Then, like now, most parliamentarians rejected a no-deal exit, and therefore reasoned that the government’s negotiations would — of course — ensure a good deal in the end. Motivated reasoning is a particularly pernicious cognitive problem: when the undesired becomes the unthinkable, beware.

Johnson’s choices

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Boris Johnson: impulsive bullshitting? Image: Wikimedia commons)

More serious were his choices to prorogue parliament and to kick out 21 Conservative MPs who had voted against the government in order to block a no-deal Brexit. The first decision made him an untrustworthy person in the eyes of many MPs, and undoubtedly fuelled their determination to prevent a no-deal Brexit. The second led to his losing his already precarious majority in parliament, making it very hard for him to gain the approvals he needed to make good on his pledge to “leave the EU by 31 October, do or die”. Impulsive actions can feel rewarding in the moment, but you risk overlooking the detrimental longer-term consequences.

But perhaps the most instructive insight comes from the preoccupation with the 31 October deadline. Of course, sometimes deadlines are imposed upon us, and in such cases indecision and dithering are best avoided. In this case, however, the deadline is self-imposed. There is a genuine trade-off to be made between a no-deal exit on this date, and a deal at a later date. Sure, many people are fed up with the Brexit process, but are they willing to tolerate a no-deal Brexit, especially as an exit on 31 October is by no means the end of Brexit? Once the UK is out of the EU, the negotiations about the future trade arrangements start, and they are likely to take years.

Avoiding a delay by making a quick decision can feel very salient in the moment, to the point of being prepared to do so ‘at all costs’. These costs, as well as the consequences of making a hurried decision look vague and distant. But these consequences will often still be felt when the delay is long forgotten. Time pressure distorts our judgement, and gives more weight to emotions, beliefs and ideology, to the detriment of deliberate, calculated reasoning.

Let us, above all, remember that the decisions listed here were made by humans, just like us. We may find it easy to see how, and perhaps why, they were flawed, from the comfortable position of a bystander with hindsight. Rather than blame them, we ought to recognize how we, too, are liable to make the same mistakes, if we are not very careful indeed.

(*): Does it matter whether the conjectures in this article are entirely accurate? Not all that much: as long as they are plausible explanations for the flaws in these decisions, they can help us spot problems and make better decisions.

Originally published at http://koenfucius.wordpress.com on October 25, 2019.

Thank you for reading this article — I hope you enjoyed it. Please do share it far and wide — there are handy Twitter and Facebook buttons nearby, and you can click here to share it via LinkedIn, or simply copy and paste this link. See all my other articles featuring observations of human behaviour (I publish one every week) here. Thanks!

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Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

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