School Business Affairs September 2020

8 SEPTEMBER 2020 | SCHOOL BUSINESS AFFAIRS FINANCE AND ACCOUNTING Re-engineering Choice Architecture to Improve Budget Decisions A new way to look at the functions and tasks that SBOs perform—and a call to action. By Bo Yan H idden behind the myriad decisions district leaders make about school and district finances is a choice architecture that, explicitly or implicitly, defines and shapes their decision making. Drawing from behavioral economics, this article offers a new way to look at the functions and tasks that school business officials (SBOs) perform in relation to the choice architecture in their districts and calls for rethinking the role SBOs can and should play in facilitat- ing those decisions. Specifically, I highlight three essential components of choice architecture: default, anchoring, and framing. I discuss prevalent design features of each component and their impact on budgetary decisions and, based on the discussion, propose ideas for reengineering choice architectures commonly found in many school districts so SBOs can better support and influence district lead- ers’ goal of optimal use of taxpayer money for stu- dent success. Default Choice Default is the preset choice among available options until a new decision is made. For example, many of us stick with the same auto and home insurance company year after year despite receiving ads from its competitors that remind us of the options we have and the money we could save by switching from the default. Defaults are powerful. As Nobel Laureate Richard Thaler and his colleague Cass Sunstein express in their FIZKES/STOCK.ADOBE.COM