11 August 2010

Sharp elbows and slippery slopes: the problem with 'nudging'*.

It has finally leaked out that Number Ten have established a rather Orwellian-sounding behavioural insight team, or "Nudge Unit" (registration).

While recognising its limitations, it's fair to say that I'm a little more than agnostic about the so-called "nudge agenda". The ideas that continue to emerge from the fields of social psychology and behavioural economics can support our daily interactions with each other and our personal professional development. Businesses have felt the benefit of the analyses provided by the likes of Robert Cialdini and others.

We're not, however, all going to become Derren Brown - and the State certainly isn't - by reading a few self-improvement books (for that's basically what we're talking about here). Even if, beyond the illusory elements of his act, there are some easily replicable examples of nudging that may have an everyday application:

If you like that sort of thing.

Does all this mean that government should be pursuing policy goals by seeking to influence and persuade individuals to take certain courses of action based on these "libertarian paternalist" principles?

Liberal concerns focus on the abuse of the term "irrational" to describe human behaviour (as Tim Worstall and Stuart Derbyshire explain). While the scope for greater individual freedom within any government initiative is welcomed.

Those of a more social democratic bent can be more comfortable with such attempts to find a balance that provides the maximum utility for society while retaining free choice.

Most importantly, the question of who decides what is best (and how), before designing the relevant nudge, should interest us all.

Either way, it seems to me that any policy led by "behavioural insight" faces huge challenges if it is to be effective in the long-term. The danger is that it will either fail to have an enduring impact. Or evolve into direct compulsion.

The first of these is due to the very human nature that it seeks to exploit. As policies based on behavioural insight become more common and more obvious, people will become more aware that they are being nudged. What starts as a gentle, maybe barely perceptible, little push in the right direction, can start feeling like a very sharp elbow indeed.

Fig 31 of the Nudge Unit's new manual
had attracted much controversy

At this point, naturally rebellious streaks might kick in, as individuals seek to reassert sovereignty over themselves.

What happens then? Does the State start indulging in reverse-psychology with the citizen? Will Downing Street have to start endlessly gaming double, triple, quadruple bluffs in pursuit of the desired behavioural scenario? Or we will simply have to revert to more traditional regulation?

On the point about controlling the evolution of the process, those who are enthusiastic about policy led by behavioural insight need to explain how nudging can be prevented from slipping all too easily into compulsion. Anarcho-capitalist David Friedman points out that:
[It] depends on leaving the individual free, at no significant cost, to make the choice you don't want him to make. But if you don't want him to make that choice, it will be tempting to make it more and more difficult...to neglect to tell him that...the alternatives you don't want him to choose are available. There is thus a serious slippery slope problem, making it possible for libertarian paternalism to be used as the justification for government actions that end up as paternalism, or compulsion for other purposes.
He highlights the following from his own experience:
It was the beginning of my daughter's first year at college and the college sent us a bill, a list of charges and a total we were to pay. One of the items in the list, included without explanation, was ten dollars for the "Green Edge Fund"...it was a fund to subsidize environmental projects by students. It had been voted in the previous year—as an optional ten dollar per pupil payment.
"Optional" means that you don't have to pay. We sent in our check minus the ten dollars and I sent an email to the president of the College, pointing out that he was billing parents for money they did not owe. I received back an apologetic email from an administrator, explaining that the program was a new one and they had not yet gotten everything set up properly.
A month or so later I received a bill from the College for ten dollars. I wrote back...pointing out that they had billed me, and all other parents, for ten dollars we didn't owe.
A few weeks later, I received a second bill for ten dollars—shortly followed by an email from the administrator telling me that the matter had been taken care of and I could ignore the bill.
Recently, we got our bill for the second semester. It included a form for our daughter to sign and hand in during the first two weeks of the semester requesting a waiver of the charge for the Green Edge Fund.
The bill did not include any mention of the fact that the College had, in the previous semester, charged parents for some tens of thousands of dollars that they did not owe, nor any offer of a refund to any parent who wanted it.
It starts out as advice and through a mixture of bureaucratic incompetence and political motivation, it becomes compulsory. That is not to say that there is anything wrong with compulsion per se. It's just that it might be fairer and more honest if we started from that point in the first place.

But if the challenges of evolving compulsion and obsolescence can be overcome then a welcome for the behavioural insight team, and its attempts to work with the grain of human nature rather than against it, is due.

*As per the Grand Universal Blogging Clichés Directive, I hereby embed that Monty Python sketch in order to comply with Rule #94 concerning all posts dealing with the "nudge agenda":