Tim Harford
The Financial Times
Originally posted
Here is an excerpt:
Chater and Loewenstein argue that behavioural scientists naturally fall into the habit of seeing problems in the same way. Why don’t people have enough retirement savings? Because they are impatient and find it hard to save rather than spend. Why are so many greenhouse gases being emitted? Because it’s complex and tedious to switch to a green electricity tariff. If your problem is basically that fallible individuals are making bad choices, behavioural science is an excellent solution.
If, however, the real problem is not individual but systemic, then nudges are at best limited, and at worst, a harmful diversion. Historians such as Finis Dunaway now argue that the Crying Indian campaign was a deliberate attempt by corporate interests to change the subject. Is behavioural public policy, accidentally or deliberately, a similar distraction?
A look at climate change policy suggests it might be. Behavioural scientists themselves are clear enough that nudging is no real substitute for a carbon price — Thaler and Sunstein say as much in Nudge. Politicians, by contrast, have preferred to bypass the carbon price and move straight to the pain-free nudging.
Nudge enthusiast David Cameron, in a speech given shortly before he became prime minister, declared that “the best way to get someone to cut their electricity bill” was to cleverly reformat the bill itself. This is politics as the art of avoiding difficult decisions. No behavioural scientist would suggest that it was close to sufficient. Yet they must be careful not to become enablers of the One Weird Trick approach to making policy.
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Behavioural science has a laudable focus on rigorous evidence, yet even this can backfire. It is much easier to produce a quick randomised trial of bill reformatting than it is to evaluate anything systemic. These small quick wins are only worth having if they lead us towards, rather than away from, more difficult victories.
Another problem is that empirically tested, behaviourally rigorous bad policy can be bad policy nonetheless. For example, it has become fashionable to argue that people should be placed on an organ donor registry by default, because this dramatically expands the number of people registered as donors. But, as Thaler and Sunstein themselves keep having to explain, this is a bad idea. Most organ donation happens only after consultation with a grieving family — and default-bloated donor registries do not help families work out what their loved one might have wanted.
