‘Nudge’ makes News at Ten!

No. Not Nudge Acupuncture. Sadly this News at Ten article tonight told us about the Behaviour Insights Team that started life inside 10 Downing Street as the world’s first government institution dedicated to the application of behavioural sciences. You may not see the relevance, but this approach is very similar to the way I see acupuncture working. Read on and see what you think. 

Since the Behavioural Insights Team was created in 2010, there has been considerable media interest in the team’s work. Often referring to the team as ‘the Nudge Unit’ (after the work of Professor Richard Thaler, co-author of Nudge and academic advisor to the team), much of the media interest has focused on the influence the team has had within Whitehall and overseas; and the methods and insights that the team has applied to public policy.

Understanding better the choices that people make and the motivation behind them is central to many companies’ marketing strategies and tactics. It is just as important in designing public policy.

Behavioural economics has been trying to get beyond the basic assumption underpinning much of modern economics – that people are rational, utility-maximising automatons.

Using insights from psychology (which show that we are far less rational and calculating than was once assumed), scholars are coming up with all sorts of suggestions on how policies can be designed to achieve better collective and individual outcomes – but without trampling on liberties.

American Cass Sunstein (who just happens to be married to Samantha Power, the Irish-born US ambassador to the UN) is a leader in the field of behavioural economics.

A book on how people can be gently “nudged” to make better decisions, co-authored with Richard Thaler in 2008, has been enormously influential in policy-making circles. Across the water, David Cameron even established a “nudge unit” in Downing Street when he became prime minister in 2010.

In a recent paper,* Sunstein adds some important insights gleaned from his research.

Nudges are interventions that steer people in particular directions, while not preventing them from going in any other way, hence the (wordy) term “libertarian paternalism”.

And nudges can be big or small.

Re-arranging the display in a cafeteria (to make the healthier options more accessible) is a nudge in the direction of better nutrition and keeping obesity at bay.

Automatically enrolling citizens or employees into pension plans (in order to sidestep any inertia and procrastination) is another much-discussed nudge – but it is only a nudge because it is accompanied by an opt-out, which doesn’t remove the citizens’ freedom to choose.

Underpinning all of this is the greater understanding that we now have of behaviour – because humans make lots of very predictable errors. If policymakers can anticipate them and devise policy to reduce the error rate, then everyone wins and no one loses.

Nudge theory has already reached Irish shores. An opt-out system for organ donors is being proposed to replace the current opt-in one. Prompted by success in the UK, the Office of the Revenue Commissioners have been experimenting with the wording of letters in order to improve tax-compliance rates.

To quote their website:
“Our objectives remain the same as they always have been:

  • making public services more cost-effective and easier for citizens to use;
  • improving outcomes by introducing a more realistic model of human behaviour to policy; and wherever possible,
  • enabling people to make ‘better choices for themselves’

We do this by redesigning public services and draw on ideas from the behavioural science literature. We are also highly empirical; we test and trial these ideas before they are scaled up. This enables us to understand what works and (importantly) what does not work.

Our staff have either a strong academic grounding in economics, psychology, or randomised controlled trial design; or a background in government policy-making.
Our Academic Advisory Panel includes Richard Thaler, co-author of Nudge; former Cabinet Secretary Lord Gus O’Donnell (the panel’s chair); and senior academics from leading UK Universities.”