Is nudging enough?
July 31, 2011 Leave a comment
Rene Kinzett, one of my fellow contributors over at Dale & Co, posted Nudging or Nannying last weekend. The argument was perhaps a little cryptic, but the point was that relying on the subtlety of trying to “nudge” behaviour in the right direction is not an adequate policy response to certain types of problem. His example of treating rickets among young women who for cultural reasons do not have enough exposure to sunlight is an interesting one. He referred to minimum alcohol pricing, a policy being introduced in Scotland, and banning smoking in cars carrying children, a policy being introduced in Wales, as more conventional regulatory policy that will help those on the edges of society, when nudges are judged inadequate.
A couple of comments took Kinzett to task for this argument. One made the point that nudge theory is being preferred for developing policy at the moment because it has been shown to be more effective than traditional regulatory approaches. It was also arguing that no one is suggesting that nudge can be used in isolation and should be combined with other mechanisms to deliver better social outcomes.
It seems to me that these comments miss the mark in at least a couple of ways.
The reignited interest in nudge over the last couple of weeks is in part a result of the publication of the House of Lord’s Science and Technology Select Committee report on Behaviour Change. The report roams quite widely over the role of research and evidence in informing policy, but there are three arguments that strike me as particularly important.
A key line of argument in the report is precisely that the effectiveness of nudge interventions has not been demonstrated at the population level. There is experimental evidence that nudge can work in certain circumstances. But it isn’t at all clear how this aggregates up and over what range of behaviours it can be applied effectively. The report makes some important points about how, if the Government is very keen on behaviour change initiatives, evidence of their effectiveness needs to be captured and knowledge needs to be shared. One recommendation is the establishment of the post of Chief Social Scientist in government to facilitate this (although, as noted by Jessica at Soft Paternalism, precisely what type of social scientist is an important question). Overall, the message on the effectiveness of nudge is as yet “not proven”.
A second line of argument by the Select Committee is that, given absence of a track record of effectiveness, the Government’s enthusiasm for nudge should be tempered. So, pace the commenter on the Kinzett post, one of the features of current policy development is precisely a focus on nudge and a rejection of more traditional regulatory approaches. The original Thaler and Sunstein Nudge argument may have been that nudge should be seen as complementary to other forms of intervention. But that message seems to have got entirely lost somewhere in translation into policy. Or, if one were more charitable, the government’s position on this issue is less than consistent.
A third, and important, line of argument developed by the Select Committee is one that resonates with all attempts to move beyond traditional regulation and embrace self- or peer regulation mechanisms and systems of voluntary compliance. When the practical development of policy informed by nudge theory is examined it is clear that industry representatives can play an important role in framing proposals. That can mean that policy may end up departing from the approach that nudge theory suggests is most likely to work. The Committee examines the case of food labelling, which indicated that the approach nudge suggests is most likely to work was deemed to be unacceptable to the industry. That, it seems to me, is not a criticism of nudge specifically, but it is a challenge to claims that policy development is firmly evidence based. It raises much bigger questions about who is in charge of the policy making process and for whose benefit is policy made.
Nudge is, at one level, a bit of a fad. The enthusiasm for it in some quarters will most probably wane. But at its heart there are some important ideas with the potential to deliver enhancements in social welfare. But it isn’t a panacea. And nor should more conventional approaches to regulation be rejected out of hand. They may well not be perfect, but they may still be the most effective mechanism we have for achieving certain types of policy objective.