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«Query: To what degree has behavioural economics and, in particular, the concept of 'nudging' been understood and used in development interventions to ...»

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Joint evaluation undercuts the tendency toward gender bias. This gender-equality nudge is ―successful in making employers choose based on ability, irrespective of the gender of the candidate and the implicit stereotypes that the employer may hold,‖ the authors write. The study also offers insights into why employers tend to react differently when evaluating candidates jointly or separately. In joint evaluation, they propose, the employer has more data to update his or her stereotypical beliefs about the sex a candidate belongs to. More important, the authors contend, ―is that employers may decide differently in joint than in separate evaluation because they switch from a more intuitive evaluation mode based on heuristics in separate evaluation to a more reasoned mode when comparing alternatives in joint evaluation.‖ Nudge No More: Benevolent meddling won‟t help us make good decisions.

Henry Farrell and Cosma Shalizi, Saturday, Nov. 12, 2011 http://www.slate.com/articles/health_and_science/new_scientist/2011/11/does_nudg e_policy_work_a_critique_of_sunstein_and_thaler_.html Libertarian paternalists are often wrong on the underlying social science. For example, Thaler and Sunstein's claims about the benefits of opt-out schemes are belied by little evidence it increases donations. According to Kieran Healy, a sociologist at Duke University differences in donation rates are better explained by differences in organisational effectiveness than differences in opt-in/opt-out. It is not clear that opt-out would increase donations; unsexy but crucial reforms to regional schemes would almost certainly work better.

This points to the key problem with "nudge"-style paternalism: presuming that technocrats understand what ordinary people want better than the people themselves. There is no reason to think technocrats know better, especially since Thaler and Sunstein offer no means for ordinary people to comment on, let alone correct, the technocrats' prescriptions. This leaves the technocrats with no systematic way of detecting their own errors, correcting them, or learning from them.

And technocracy is bound to blunder, especially when it is not democratically accountable.

As political scientist Suzanne Mettler of Cornell University argues, libertarian paternalism treats people as consumers rather than citizens. It either fails to tell people why choices are set up in particular ways or actively seeks to conceal the rationale. When, for example, Obama's administration temporarily cut taxes to stimulate the economy, it did so semi-surreptitiously to encourage people to spend rather than save.

Mettler uses experiments to show how ordinary people can understand complicated policy questions and reach considered conclusions, as long as they get enough information. This suggests a far stronger role for democratic decision-making than libertarian paternalism allows. People should be given information, and allowed to reach conclusions about their own interests, and how to structure choices to protect those interests. By all means consult experts, but the dialogue should go both ways.

Results from agent-based modeling, evolutionary theory, network theory, and experiments in group decision-making also support Mettler. Take the "diversity trumps ability" theorem of Scott E. Page, from the University of Michigan: Groups of agents with diverse understandings of the world will solve difficult problems better than narrowly focused groups with higher expertise.

And models of evolutionary search, starting with the "genetic algorithms" of John Holland, also at Michigan, suggest higher diversity per se makes it easier to find paths to new fitness peaks. Research into the sociology of networks also finds innovation is most likely at points where different views intersect.

All this suggests democratic arrangements, which foster diversity, are better at solving problems than technocratic ones. Libertarian paternalism is seductive because democratic politics is a cumbersome and messy business. Even so, democracy is far better than even the best-intentioned technocracy at discovering people's real interests and how to advance them. It is also, obviously, better at defending those interests when bureaucrats do not mean well.

While democratic institutions need reform to build in dialogue between citizens and experts, they should not be bypassed. By cutting dialogue and diversity for concealed and unaccountable decision-making, "nudge" politics attacks democracy's core. We should not give in to temptation—and save our benevolent meddling for family reunions.

Julia Neuberger: 'A nudge in the right direction won't run the big society' The Observer, Sunday 17 July 2011 http://www.guardian.co.uk/society/2011/jul/17/julia-neuberger-nudge-big-society http://www.bbc.co.uk/news/health-14186806 The problem, as Neuberger saw it, was that there was "precious little" evidence to show that nudge worked beyond a purely individual basis. So the Lords set up a subgroup of its respected science and technology committee to examine the issues.

After 12 months of research, 148 written submissions and evidence from 70 witnesses, the report will be published on Tuesday. It will make uncomfortable reading for Cameron because, according to Neuberger, nudging people is not normally enough.

"Basically you need more than just nudge," she says, when we meet in the Lords.





"Behavioural change interventions appear to work best when they're part of a package of regulation and fiscal measures," she adds, putting down her papers and a large canvas bag from Daunt Books in Hampstead. She notices me looking at the bag. "I use it for everything! I don't like briefcases."

The difficulty with nudge theory, she says, is that "all politicians love quick fixes. I mean, they look at very short time frames. I think one of the problems with all of this is if you really want to change people's behaviour it takes a very long time … you have to look at a 20- to 25-year span before you get a full change of behaviour."

As an example, Neuberger points to the efforts to persuade people to wear seat belts in the 1970s, which incorporated an advertising campaign and legislation. "So it was

a whole series of measures that did eventually change the climate." Later, she adds:

"I think politicians would be well advised to use these sorts of behavioural interventions as part of an armoury."

Nudge, think or shove? Shifting values and attitudes towards sustainability A briefing for sustainable development practitioners, November 2010 http://www.involve.org.uk/wp-content/uploads/2011/03/Nudge-think-or-shove.pdf Pursuing sustainability requires widespread shifts in public behaviour. This briefing builds on a recent House of Lords round table to consider three broad approaches to influencing public behaviour: ‗nudge‘, ‗think‘ and ‗shove‘. The authors consider the benefits and drawbacks of each, and explore how the three approaches can complement one another.

The findings are:

 ‗Nudge‘ is effective for specific, limited shifts in behaviour such as recycling.

 ‗Think‘ is effective at building support and legitimacy for the big, transformational changes that we need in society, such as decarbonising the economy. ‗Think‘ can be particularly powerful in building people‘s ability and motivation to participate in and drive those transformational changes.

 ‗Shove‘ often helps to create the conditions under which ‗nudge‘ is most effective.

Building on these insights, the authors start to sketch out an optimal mix of ‗nudge‘, ‗think‘ and ‗shove‘, which uses the best of all three approaches to transform social values and attitudes towards sustainability at the pace needed.

Nudging farmers to use Fertilizer: Evidence from Kenya Duflo, E., M. Kremer and J. Robinson, American Economic Review, 2010 http://cega.berkeley.edu/projects/nudging-farmers-use-fertilizer-experimentalevidence-kenya/ Overall, the results suggest that offering farmers small, time-limited discounts on fertilizer may substantially increase usage without inducing overuse among farmers who are already using fertilizer, at relatively low cost.

Nudging Boserup? The impact of fertilizer subsidies on investment in soil and water conservation Godwin K. Vondolia, June 2011 http://gupea.ub.gu.se/bitstream/2077/25683/1/gupea_2077_25683_1.pdf The study evaluates the extent to which fertilizer subsidies nudge soil and water conservation efforts among smallholders in Ghana.

The Nudge Blog http://nudges.org/tag/charity/ The Nudge blog is the online companion to Richard Thaler and Cass Sunstein‘s ―Nudge: Improving Decisions About Health, Wealth, and Happiness.‖ Here you‘ll find much more about nudging, choice architecture, libertarian paternalism, and many other terms you won‘t read about in standard economics books.

Dan Ariely‟s Blog http://danariely.com/ A behavioural economics blog.

7. Additional information Author This query response was prepared by Catherine Holley, C.Holley@ids.ac.uk Contributors Adam Fletcher, Lecturer in Sociology and Social Policy, LSHTM Professor Theresa Marteau, Professor of Health Psychology, King‘s College London Tony Worsley, Professor of Behavioural Nutrition, Deakin University, Australia About Helpdesk reports: The HDRC Helpdesk is funded by the DFID Human Development Group. Helpdesk Reports are based on up to 2 days of desk-based research per query and are designed to provide a brief overview of the key issues, and a summary of some of the best literature available. Experts may be contacted during the course of the research, and those able to provide input within the short time-frame are acknowledged.

For any further request or enquiry about consultancy or helpdesk services please contact just-ask@dfidhdrc.org Disclaimer The DFID Human Development Resource Centre (HDRC) provides technical assistance and information to the British Government’s Department for International Development (DFID) and its partners in support of pro-poor programmes in education and health, including nutrition and AIDS. The HDRC services are provided by three organisations: Cambridge Education, HLSP (both part of the Mott MacDonald Group) and the Institute of Development Studies. The views in this report do not necessarily reflect those of DFID or any other contributing

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