8 December 2013

Britain’s Ministry of Nudges

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The title of this New York Times article sounds like a Monty Python sketch (intentionally, I guess). But the article is luckily quite a lot more serious, exploring how the British government – inspired by American behavioral economics – is finding new ways to gently prod people to pay taxes, find jobs and insulate their homes:

“A small band of psychologists and economists is quietly working to transform the nation’s policy making. Inspired by behavioral science, the group fans out across the country to job centers, schools and local government offices and tweaks bureaucratic processes to better suit human nature. The goal is to see if small interventions that don’t cost much can change behavior in large ways that serve both individuals and society.

It is an American idea, refined in American universities and popularized in 2008 with the best seller “Nudge,” by Richard H. Thaler and Cass R. Sunstein. Professor Thaler, a contributor to the Economic View column in Sunday Business, is an economist at the University of Chicago, and Mr. Sunstein was a senior regulatory official in the Obama administration, where he applied behavioral findings to a range of regulatory policies, but didn’t have the mandate or resources to run experiments.

But it is in Britain that such experiments have taken root. Prime Minister David Cameron has embraced the idea of testing the power of behavioral change to devise effective policies, seeing it not just as a way to help people make better decisions, but also to help government do more for less.”

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