Peter John, How Far to Nudge?

Peter John, How Far to Nudge? Assessing behavioural public policy, Edward Elgar, 2018, xi + 173 pp, 1 78643 056 4, pbk, £25. The eBook is priced from £22 from Google Playebooks.com and other eBook vendors, while in print the book can be ordered from the Edward Elgar Publishing website.

What are governments to do when faced with such large and complex problems as climate change and inequality? The foundational insight of behavioural economics is that these problems are rooted in individuals’ behaviours: so governments need to ‘nudge’, in order to shift behaviour patterns that damage both individuals and societies towards more beneficial behaviours. This insight has generated an industry of experiments in order to discover the roots of behaviours and the most effective nudging mechanisms. As behavioural economists understand the situation, the problem to be overcome is that for the individuals concerned there might be no short-term gain to changing their behaviour, even if many individuals changing their behaviours would benefit society as a whole and themselves as individuals. A secondary problem is that in an era in which governments are less trusted, a government explaining to individuals how changed behaviour would benefit themselves and others might be counterproductive. This situation requires governments to tailor messages so that they will be heard, and to adjust the ‘choice architecture’ facing individuals in such a way as to encourage more beneficial behaviour: so instead of telling people to keep their doctors’ appointments, the message might state how much more money would be available to the National Health Service if everyone kept their appointments; instead of telling people to pay their taxes on time, a government might inform taxpayers that nine out of ten people have already paid their tax, thus reinforcing a social norm; and to change the choice architecture for pension contributions from opt-in to enforced enrolment that allows for an opt-out might again reinforce an existing social norm.

This book studies the history of behavioural approaches, both in the academy and in policymaking; it discusses some criticisms of the approach (perhaps the most serious being that such policymaking can divert attention from potentially beneficial more interventionist policy), and it debates the ethics of nudge. The penultimate chapter asks about the difference between nudges that work without the nudged being invited to think (for instance, putting sweets next to the supermarket checkout), and nudges that require the nudged to think (putting fruit by the checkout): in this case the thinking process being facilitated by the kind of ‘boost’ exemplified by the ‘five a day’ slogan that has turned a more traditional policy prescription into an effective nudge. If this book has a message, then it is to encourage nudges that invite engagement and feedback on the part of the individual, and the kind of widespread public debate that has made it possible for governments to pass laws against smoking in public places and for those laws to be widely accepted and obeyed.

But there is a problem, referenced early in the book: even though academics have often made their behavioural science as easy to understand as possible, and governments have publicly and institutionally committed themselves to behavioural approaches in policymaking, there can be institutional constraints to the extent to which policy can reflect behavioural insights, and policymakers, and those who implement policy, are as likely to behave irrationally as those for whom they are making and implementing policy. So who will nudge the nudgers? And similarly: as John points out, alongside a shift in mainstream economics towards a recognition that we might wish to maximise others’ utilities as well as our own, behavioural economics, by problematizing the rational utility-maximising individual, has attacked the classical economic model at its heart. Who will nudge the economists towards new economic models? The behavioural sciences might have handed the wealthy and powerful elite yet one more means of controlling society to their own benefit; or it might, according to the author, have provided the internet-connected public with a means of nudging policymakers and public policy.

Peter John has written a most interesting introduction to the field of ‘nudge’. What would be equally interesting would be an extended case study of one particular social policy field: perhaps of social security benefits, employment, and the relationships between them – subjects not tackled in this book. There would be plenty to discuss: for instance, Richard Thaler’s finding that the certainty of not losing is felt to be preferable to uncertain gain or loss, [1] suggesting that a Citizen’s Basic Income would always be preferable to a system containing only taxes and benefits that vary with uncertain earned income.

 

Note

[1] Richard H. Thaler (2015) Misbehaving: How economics became behavioural, London: Allen Lane, pp 33-4

 

 

 

 

 

Footnotes

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