Nudge Fudge Leaves Policy Makers in the Dark

What are the surprising results that we found?

Many governments across the world including the United Kingdom's government use psychological and behavioral economic techniques (nudges) to steer us towards making beneficial decisions. These techniques are designed to achieve a range of policy goals (e.g., improving diet, uptake of smart meters, increasing water savings, increasing organ donation, switching saving accounts).

Our work published this week analyses all 111 cases studies of behavioral techniques used by governments compiled by the OECD (Organisation for Economic Co-operation and Development). Our analysis demonstrates that none of the techniques used have scientific proven effectiveness. Of the 111 cases, 16 percent did not qualify as psychological and behavioral economic methods. 58 percent were not found to have the anticipated effect on behavior. Eighteen percent of the total were later implemented by governments.

No details about the cost of these initiatives were given, where the interventions were positive, there is no information on the scale of the impact. Therefore, together these omissions mean policy makers are unable to make any practical judgement of cost effectiveness.

We acknowledge the vital importance of attempting to get an overview of work in this field, what is actually required for this to be truly effective for policy guidance is a rigorous systematic collection of data and reporting, and far greater transparency and accessibility in the underlying research.

Why is the study important?

By harnessing psychological research, governments across the world are trying to shape our behavior. While they are popular, our findings reveal that based on the OECD report, these psychological techniques are unreliable. The common argument in support of using them is that they are cost effective, but here also there is nothing in the report that helps the public assess if these psychological methods, when they work, are more cost effective compared to typical methods used by governments (e.g., taxes, bans, tariffs, mandates).

What are the wider implications? What are the recommendations?

There may be good reasons to use psychological techniques to help improve behavior from increasing our saving for retirement to eating more healthily, but without a systematic means of reporting the psychological methods used by governments across the world, researchers, practitioners and the public will continue to remain in the dark about how they are implemented, how effective they are, and what benefits there are to the individual and the state. Our paper helps to highlight the gaps in our knowledge and how to address these gaps so that we have answers to these critical questions.

While we welcome the OECD work as a very useful starting point, there is a very long way to go before social scientists are able to reliably assess the effectiveness of these interventions. But we call for more effort to rigor and transparency in data collection and reporting on behavioral interventions.