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Gently Does It: Using Nudges For Policy Outcomes

Using inexpensive online technologies like SMS, push notifications, email, WhatsApp messages, and gamification can be useful in encouraging people to take up new behaviours.

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When you buy a coffee, you’re likely to purchase a muffin as an accompaniment when offered as a suggestion. When stores charge you extra for a carry bag, you’re less likely to purchase one, thus reducing consumption of plastic. Schools often adorn their walls with inspirational quotes to encourage students to think a certain way. These small changes which affect behavior without actually taking away one’s agency to choose is ‘nudging’ at its simplest. 

The concept is a powerful one, a fortiori when used in governance. 

Behavioural economics, the fashionable fusion of economics and psychology has emerged a winner in the past decade. While 18th century Scottish economist and philosopher Adam Smith was the first to proffer psychological explanations of individual behavior in his book The Theory of Moral Sentiments (1759), followed by psychologist Daniel Kahneman, who won the 2002 Nobel Prize in Economics for his pioneering work in applying psychological insights to economic theory, nudge theory gained real momentum 11 years ago, when Richard Thaler and Cass Sunstein’s book ‘Nudge’ introduced the concept of choice architecture: the idea that subtle tweaks to available choices in our environment can influence our decision making in a noncoercive way. 

The last decade of public policy formulation has seen a burgeoning interest in the application of behavioral science and it is now a commonly used tool in the public sector, thanks to the presence of multiple government nudge units and their impressive results. In 2010, the UK set up a Behavioral Insights Team (BIT), becoming the first country to ever set up a nudge unit. Since then, there has been a proliferation of formal nudge groups within governments of countries like USA, Germany, Japan, Denmark, Singapore, among others. 

India too has been doing a remarkable job of applying behavioral science to policy implementation. Recently, Cass Sunstein, who pioneered ‘Nudge Theory’ along with Nobel Prize winning economist, Richard Thaler, was generous in his praise for India’s efforts of incorporating behavioural insights in public policy. 

Many Indian schemes like Swachh Bharat, Jan Dhan Yojana, Digital India and Skill Development are rooted in theories of behavioral economics. Consider the issue of use of toilets for example. There is a huge body of research to show that even people with access to toilets prefer to defecate in the open, which begs the question, how should any government programme that seeks to alter this behaviour be conceived? 

The answer was found in Prospect theory wherein Nobel prize winning social scientists, Daniel Kahneman and Amos Tversky argued that people are loss averse, i.e. losses have a bigger emotional impact than a proportionate amount of gain. Its application in the context of open defecation, led to communication from the government focusing on how open defecation will harm a community rather than how it would benefit it. So, by highlighting the damaging effects of poor sanitation through an integrated communication strategy, Swachh Bharat was able to influence behaviours of millions. 

‘Nudging’ also played a key role in containing the spread of Covid 19 virus in India. According to a 2020 Cambridge study, nudges from Prime Minister Narendra Modi were vital in creating a herd effect on Indians to stay indoors. The study also noted that his frequent appearances on TV was “the most significant factor that created nudges” in keeping a country of 1.3 billion people under strict lockdown.

It is clear how nudging has been used successfully by governments by providing behavioral remedies to social problems. However, thanks to technology the future of nudging will be different.

With the  2019 Economic Survey clearly stating that Behaviour changes will push India towards becoming a $5 trillion economy by 2024-25, the government now needs to focus on the next generation of nudges, which amalgamates design thinking, data, and predictive analytics into policies. Data scientists and social scientists are already working in conjunction with each other with advanced data analytics being used to improve behavioral insights. This has evolved governments interact with its citizens.

Nudge units around the world are using latest methods from data science, machine learning and predictive analytics to make smarter policy applications. Considering the staggering volume of data we accrue, behavioral predictions— enabled by data analytics— can be startlingly accurate. This can allow governments to learn more about the behavior patterns of its citizenry and design targeted behavioral nudges. 

In India, more and more public services going online is leaving a massive digital footprint too, and with the right tools, the government will be able to develop the most powerful and well-targeted behavioral nudges possible. And with over 1.5 billion Indians expected to access internet via their mobile phones by the year 2050, digital nudges in India can leverage he ubiquity of mobile devices and the internet to expedite the adoption of modified behaviours. Using inexpensive online technologies like SMS, push notifications, email, WhatsApp messages, and gamification can be useful in encouraging people to take up new behaviours.

So, how is this linked to better policymaking? The answer is simple. Instead of adopting a ‘hit and trial’ approach, governments can develop pointed and tailored behavioral nudges for its citizens. With the availability of modest online records, governments have already made enormous progress in scaling behavioral nudges. However, as data sets grow, the old approach of using best guesses will be replaced by machines which will automatically analyze, learn and improve. Policy design doesn’t get smarter than that.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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policy policy implementation public policy

Devika Sharma

Strategic Communications Consultant

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