When Officials Don’t Know What They Don’t Know: Dunning-Kruger Effect in the Case of Green Budgeting for Local Government

Alvin Ulido Lumbanraja

Abstract:

This paper extends the key findings of Kruger & Dunning (1999), which shows that people who are unskilled in a given domain tend to be unaware of their lack of skills, to government circle that is supposed to be filled by professionals. This paper compared individual government officials’ self-assessment of their offices’ ability to perform certain tasks related to green budgeting with their responses to questions that implicitly assess their actual ability to perform such tasks. Consistent with Kruger & Dunning (1999), individuals who have sufficient knowledge and expertise in a given domain tend to have more accurate self-assessment when asked to rate their own expertise, and vice versa. This paper also discusses the theoretical underpinning of how compensation structure is related with Dunning-Kruger effect on policy design and how tying the outcome with compensation can promote learning and better metacognitive abilities, even for less knowledgeable individuals.

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