Nudging Public Policy

Given the growing popularity of behavioral economics as a means to influence the decisions that individuals make, and the increasing use of choice architecture in public policy, this book offers a critical analysis of the feasibility and limitations of this approach to public policy.

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This book asks several critical questions relevant to those interested in public policy: What is a nudge? What are the ethical implications of and justifications for nudges? Are we able to have nudges without affecting one’s freedom to choose? In what institutional context are nudges likely to work well and in what context are they likely to fail? The text explores several real-world instances of government attempts at successful choice architecture across a wide range of policy topics: internet privacy laws, environmental policy, education policy, the sharing economy, and creating a national culture.

This approach also highlights the spontaneous and evolutionary nature of social institutions like culture and trust. Attempts from policymakers to generate these social institutions where they did not exist previously are unlikely to succeed unless they are aligned with the unique characteristics of the society in question. This raises the question of whether the seemingly successful policy interventions were even necessary. A few of the chapters in this book directly examine these issues through case studies of both Latin America and Singapore.

Each chapter in this volume explores the ways in which individuals in society respond to attempts by policymakers to “nudge” them towards a specific outcome. Some chapters explore the theoretical arguments in favor of utilizing this behavioral policy approach. Others explore the feasibility and potential limitations of this approach to public policy. Several of the chapters apply market process theory to understand a particular case study where nudge policies have been put into practice. The chapters, authored by an interdisciplinary group of policy scholars, include discussions of internet privacy laws, the sharing economy, education policy, environmental policy, as well as social issues such as trust and culture.