‘Nudge’ Back in Fashion at White House

Obama and Cameron

Pablo Martinez Monsivais / AP

President Barack Obama and British Prime Minister David Cameron walk back toward the Oval Office of the White House in Washington, March 14, 2012, after their joint news conference in the Rose Garden.

When a White House adviser sent out an e-mail last month announcing that she was looking to hire social scientists to study human behavior and design public policy based on social experiments, right-wing critics were aghast: Barack Obama was going too far again.

The inspiration for Yale social scientist Maya Shankar’s team, she said in her note, is Britain. It’s in the Old World that the White House has gone looking for something new, calling a gang of consultants in the United Kingdom an inspiration. There, the so-called Behavioral Insights Team has taken a controversial philosophy and found solutions from lowering energy consumption to increasing tax collection.

The squad was established a mere three years ago, following Prime Minister David Cameron’s ascension to power. Referred to in Whitehall patois as the nudge unit, the team was inspired by the 2009 bestselling book, Nudge: Improving Decisions About Health, Wealth and Happiness by University of Chicago professor Richard Thaler and Harvard Law professor Cass Sunstein. Cameron’s political mandate was simple: influence British policies by constructing cheap, shrewd and local solutions to social problems across governmental agencies.

The nudge unit appears to have succeeded where one of its inspirations could not. During the first three years of the Obama administration, Sunstein led the Office of Information and Regulatory Affairs where he was charged with approving every new regulation the government issued based on cost-benefit analysis. Sunstein has written that his efforts were hamstrung by a political climate suspicious of his ideas. Last year several important regulations were halted before the presidential election and Sunstein’s subsequent book, Simpler: The Future of Government describes the difficulty of new thinking into government. With an entire team to focus on streamlining costs and regulation across the government, the new team is aiming to improve on Sunstein’s record.

Working at the intersection of psychology and economics, the nudge unit in Britain has tackled a number of problems ranging from reducing car theft by offering containers to de-clutter garages to increasing repayment of court fines through a text message system.

Simple social experiments circumvented difficult-to-pass legislation, altered peoples’ behavior and saved money.

“It’s about making it easy for people,” said Thaler, who advised on the BIT during its inception. “No one knows the answers to every problem, and not every idea works, so it is vital to test.”

For instance, in consulting Her Majesty’s Revenue and Customs on income tax collection, the unit found that most people living in the town or postal code where errant taxpayers reside had already paid their taxes. After testing three different messages in notification letters, repayment jumped by an estimated 15 percent.

In 2011, the nudge team focused on a governmental subsidiary to insulate attics in order to reduce energy consumption. Realizing its failure had nothing to do with the discount but rather the hassle of organizing attics, the team ran a trial to provide a loft clearance service, and though costlier, participant rates tripled.

The experiment led to a partnership with B&Q (the Home Depot of the U.K.) to assist with unwanted items on the condition that attics are insulated afterward. After identifying more than $1.5 billion in extra revenue in the next five years, the unit is now running trials in Essex job centers, varying the type of questions and interviews jobseekers experience upon each visit in order to improve the unemployment rate.

The team announced plans to restructure as a public-private partnership, allowing it to take its now 15-member staff global to consult on nudging tactics. The new partnership will take effect this fall, Owain Service, BIT’s deputy director, told TIME. While the group intends to hire more staff, nine members will remain devoted to the Cameron’s cabinet.

Within three short years, the unit has drawn international attention, serving as an example to foreign governments like Canada, France and the New South Wales government in Australia, where BIT has embedded a staff member. France and Canada are exploring ways to incorporate the nudge squad’s ideas. The nudge squad has inspired like-minded reforms in Saudi Arabia and Singapore as well.

In Denmark, Pelle Guldborg Hansen, chairman of the Danish Nudging Network and CEO of iNudgeYou.com, has been working with the Danish Business Authority and Consumer Authority to implement nudge thinking. One success? The group claims to have decreased littering in Copenhagen by 46 percent. Hansen has consulted on an organ donation bill that will go before parliament this year, advocating for what Thaler and Sunstein refer to as “mandated choice,” or allowing an individual to choose to donate upon a prompt.

“The crises that we face right now are really caused by human behavior,” said Hansen. “Of course we cannot change human behavior, and we don’t wish to, but behavioral science can help us better understand and help us do the best we can now.”

Not everyone has welcomed these ideas. Critics in the U.K., like the online magazine Spiked, decry the ethics of nudging as a manipulation of choice, a gimmicky effort that leads to a “nanny state.” Labour MP Luciana Berger has referred to it as Cameron’s “vanity project.” Despite the opposition, the new public-private structure will allow the team to sign a longterm contract with Whitehall, leaving them in place no matter who is in power. A polarized Washington could prove to be more of a hurdle for the new U.S. team.

“I’m not going to pretend that everything we do is wildly successful,” said BIT’s Service. “The whole point of testing is to find out whether or not it does work, and if it does, how effective is it?”

Still BIT’s enthusiasm for influencing behavior appears to have won fans from Copenhagen to the Washington.

“If they sold stock, I would buy them,” iNudgeYou’s Jespersen says of the BIT. “Demand is going to be high for the next 15 years and governments all over the world are going to look to them. They’re the best guys to deliver it because they’ve already proven they can do so.”

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Reprinted from here