Nudge: The Implementation of a social innovation

NudgeThe UK Government’s Behavioural Insights team has been reported as implementing a highly successful social innovation through influencing or ‘nudging’ personal decisions

The announcement this week claimed that the unit has ‘signed up an extra 100,000 organ donors a year, persuaded 20% more people to consider switching energy provider, and doubled the number of army applicants.’ Plaudits were offered to

David Halpern, chief executive of the behavioural insights team, which has quadrupled in size since it was spun out of government in February 2014. Now a private company jointly owned by the Cabinet Office, Nesta and its employees, the “nudge unit” (nicknamed after the best-selling book by economist Richard H Thaler) permeates almost every area of government policy.

Unsurprisingly, the approach is likely to be seen by some as gentle persuasion; by others as a dangerous attempt at social engineering. To understand more, we need to go back to the publication of a best-selling book Nudge and how it attracted the interest of David Cameron.

[The following is based on my unpublished notes mostly over the period 2006-8. I have tried to acknowledge the sources, and welcome any suggestions of materials I may have left unattributed.]

The Broken Society speech

On Friday 13th June 2008 David Cameron, leader of the opposition Conservative Party, addressed the Eden project on new environmentally-friendly business models. Kane (2008) suggested that the speech had been influenced by the ideas in the recently published book, Nudge, (Thaler & Sunstein, 2008).

Within a month, the influence of the book on UK policy-makers was again examined, this time in the context of what became known as The Broken Society speech made during a parliamentary by-election in Glasgow East (Kane, 2008).

Cameron’s theme had moved from environmental policy to social policies, and to innovative means of encouraging more responsible individual behaviours.

“This is the broken society by-election …[But] why would a different government be any different? Not least because we understand that the causes of our broken society lie not just in government policies but in our national culture. Changing our culture is not easy or quick. You cannot pull a lever. You cannot do it top-down. But you can give a lead. You can give a nudge” [Cameron, full text in Telegraph, 2008]

The speech made no direct reference to the book. But the connection was firmly made in an interview with Thaler, reported in the Evening Standard, (McElvoy, July 9th 2008)

Professor Thaler tells me he has been on a visitation to Camp Cameron, where he has acquired guru status. His ” Nudging” is the belief that we can be influenced – often subconsciously or covertly – to do one thing, rather than another in our own best interests. So [a nudge] encourages us to put more earnings towards our pensions by making us “opt out” of saving schemes rather than opt into them. It promises to prod children to eat more healthily by putting nutritious food at eye level in school canteens.

George Osborne, then the shadow Chancellor, confirmed his party’s interest in the concept of nudging, in an article in The Guardian (July 14th, 2008)

The Conservative party is at the forefront of this new intersect [of behavioural economics and social psychology]. We’ve been engaging with leading experts in this field, including Robert Cialdini, the author of Influence, and Richard Thaler, the co-author of Nudge, to develop policies that will work in a post-bureaucratic age where Labour’s clunking tax and regulation measures have all too often failed.

Cialdini is cited in Nudge as ‘the great guru of social influence’ (Thaler & Sunstein , 2008: 67).

Libertarian Paternalism

The origins of the book can be traced to the numerous scholarly contributions of Professor Thaler and co-workers. The basic theory goes under the daunting label Libertarian Paternalism (Sunstein & Thaler, 2003).

This appears to represent how state interventions can have benign efforts on social behaviours. The Nanny State is replaced with the notion of a force which invites individuals to move (be ‘nudged’) towards benign decisions of benefits for the individual, society and the environment.

This is a subtle and carefully developed set of concepts. The more difficult issue is the dilemma of benign influence and power relationships

To be continued

Bibliography

Evening Standard, (2008) Now Dave is giving the Tories a good nudge, Anne McElvoy, July 9th
Hogarth, R.M., and Reder, M.W., (1986) Rational choice: The contrast between economics and psychology. Chicago: University of Chicago Press
Kane, P., (2008) Nudge, nudge… Pat Kane’s big ideas for busy readers, The Independent, Friday July 11th
Luce, R.D., (2000) Utility of Gains and Losses: Measurement-Theoretical and Experimental Approaches. Mahwah, NJ: Lawrence Erlbaum Association
Luce, R. D. (1959). Individual Choice Behavior: A Theoretical Analysis. New York: Wiley
Luce, R. D. (1977). The choice axiom after twenty years. Journal of Mathematical Psychology 15: 215–233.
Osborne, G., (2008) Nudge nudge win win, The Guardian, July 14th
Sunstein, C.R., & Thaler, R.H., (2003) Libertarian Paternalism Is Not an Oxymoron, University of Chicago Law Review, 2003, 70(4), 1159.
Telegraph, (2008) David Cameron attacks UK ‘moral neutrality’ – full text, 7th July
Thaler, R.H., & Sunstein, C.R., (2008) Nudge: Improving decisions about health, wealth and happiness, New Haven: Yale University Press
Thaler, R.H., & Sunstein, C.R., (2005), Libertarian Paternalism. The American Economic Review, 93, 2, 175-179

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