Nudging to fix the world

Last week the UK media were suddenly abuzz on how behavioural insights can help government decisions and actions by being able to nudge behaviour in a favourable direction. Apparently it has become a cure-all and is now even used to “slash educational drop-out rates“, to “counter terrorism and illegal immigration“, to “fix economics“, to “make the super-rich pay their taxes”, and – hardest of all – to “make bankers donate more by just giving them sweets“.

These – and other – wonderful accomplishments are detailed in a just released Update Report 2013-2015 of the newly independent Behavioural Insights Team (some of their staff are pictured above in front of a well-known London house).

So not to be outdone, the spooks at GCHQ set up their very own nudge unit.

Is this for real, one may ask, or did quasi religious nudge fervour get hold of British journalists? Reading up, one could argue that nudging is really nothing different than behavioural sciences and user-centred design applied to major policy areas, and packaged very well. After all, this is also about the British Government just trying to build up a new export market.

Here is a run-down of the biggest articles, with The Independent, The Guardian and the Financial Times each provide a good summary of the report, the New Scientist explaining in much detail how such an approach might work in economics, and The Economist adding a cautionary note.

The Independent: Ministers turning to behavioural psychology to tackle policy problems
Behavioural experts could be behind a host of new Government initiatives based on psychology, writes Oliver Wright.

Ministers established a Behavioural Insights Team (BIT) in the Cabinet Office, which achieved remarkable early results – including reducing tax fraud and redesigning parts of the benefits system to increase incentives to find work.

Ministers now intend to expand its remit into some of the most controversial areas of Government policy.

The unit has been contracted by the Home Office to identify the most effective measures to encourage illegal migrants to leave the UK. It follows the department’s disastrous “Go home” vans initiative that was quickly scrapped following public outrage.

Nudge theory is also being used by the Department of Health to target the doctors who prescribe the most antibiotics in an attempt to modify their behaviour. The Ministry of Defence is using BIT to tackle the low rate of army reservist applications.

Sources close to the Cabinet Office suggested the unit would be involved in strategies to devise and test the Government’s new anti-radicalisation agenda unveiled by David Cameron earlier this week.”

The Guardian: The rise of nudge – the unit helping politicians to fathom human behaviour
Tamsin Rutter explains how “the government’s behavioural insights team has won over sceptics in Whitehall and it is now ‘nudging’ behaviour across the world”.

Pensions, taxes, mobile phone theft, e-cigarettes, unemployment, foster care, army recruitment, police diversity, adult education, charitable giving – you name it, Halpern and his 60 employees have probably worked on it – or applied insights from behavioural psychology to it, to be more specific. A two-year update report on the unit’s progress, published on Thursday, demonstrates that [its] new strain of policymaking is now in demand across the world.

The Financial Times: ‘Nudge unit’ defies sceptics to change Whitehall thinking
Sarah Neville, Public Policy Editor

A team set up to “nudge” Britons into making better decisions has confounded Whitehall scepticism and made back more than 20 times its original investment within two years

The New Scientist: After the crash, can biologists fix economics?
Applying what we know about evolution, ecology and collective behaviour might help us avoid another catastrophe, writes Kate Douglas.

The problems start with Homo economicus, a species of fantasy beings who stand at the centre of orthodox economics. All members of H. economicus think rationally and act in their own self-interest at all times, never learning from or considering others.

We’ve known for a while now that Homo sapiens is not like that. Over the years, there have been various attempts to inject more realism into the field by incorporating insights into how humans actually behave. Known as behavioural economics, this approach has met with some success in microeconomics – the study of how individuals and small groups make economic decisions. It has persuaded governments to “nudge” people into doing what’s best for the economy, influencing behaviour by more subtle forms of persuasion than financial inducements. In 2010, the UK government set up the Behavioural Insights Team (known as the Nudge Unit) and the White House established something similar in the US in February last year.

The Economist: The limits of nudgning
The Economist strikes a cautionary tone:

Policymakers hope that behavioural insights can improve public services and save money. But they have their limits. So far, the sums the BIT talks about consist of hundreds of millions. That is dwarfed by the £20 billion of cuts to public services that the British government plans to implement over the next three years.And although the unit’s work represents huge progress in the step towards evidence-based policies, the war has not been won yet. It is easy to persuade the government to experiment when the intervention is as cheap as changing the wording on a letter, but much more difficult to experiment with bigger, riskier changes that may harm its reputation if it goes wrong.

Other countries including Australia, Singapore, Germany and the US are now setting up nudge teams of their own. In the US, a behavioural psychology team funded by Bloomberg Philanthropies is setting out to tackle violent crime, homelessness and joblessness. Even Guatemala is using the approach, nudged on no doubt by some funding made available through the World Bank.