The ministry of nudges

Britain finds a way to prod people to pay taxes,find jobs,with all its civil servants getting training in behavioural science. White House is set to follow.

Written by New York Times | Published:December 15, 2013 5:25 am

Alex Gyani had an idea,but even he considered it a little far-fetched.

A 24-year-old psychologist working for the British government,Gyani was supposed to come up with new ways to help people find work. He was intrigued by an obscure 1994 study that tracked a group of unemployed engineers in Texas. One group of engineers,who wrote about how it felt to lose their jobs,were twice as likely to find work as the ones who didn’t. Gyani took the study to a job center in Essex,northeast of London. Sure,it seemed crazy,but would it hurt to give it a shot? Hayley Carney,one of the centre’s managers,was willing to try.

Carney walked up to a man slumped in a chair in the waiting area as Gyani watched from across the room. The man,28,recently separated and unemployed for most of his adult life,was “our most difficult case”,Carney said later.

“How would you like to write about your feelings” about being out of a job,she asked the man. Write for 20 minutes. Once a week. Whatever pops into your head.

And so,every week,he would stay and write. He wrote about applying for jobs and rarely hearing back,about his wife who had left him. He would re-read what he had written and then write again.

Over several weeks,his words became less jumbled. He started to gain confidence. Before a month,he got a full-time job — his first.

AN IDEA BORN IN AMERICA

Did the writing exercise help the man find a job? It’s hard for Gyani to say for sure. But it was the start of a successful research trial at the Essex job centre . A small band of psychologists and economists is quietly working to transform the nation’s policymaking. Inspired by behavioural science,the group fans out across the country to job centers,schools and government offices and tweaks bureaucratic processes to better suit human nature. The goal is to see if small interventions that don’t cost much can change behaviour in ways that serve individuals and society.

It is an American idea,refined in American universities and popularised in 2008 with the bestseller Nudge,by Richard H Thaler and Cass R Sunstein. Thaler is an economist at the University of Chicago,and Sunstein was a senior regulatory official in the Obama administration,where he applied behavioural findings to a range of regulatory policies.

But it is in Britain that such experiments took root. Prime Minister David Cameron has embraced the idea of testing the power of behavioural change to devise effective policies,seeing it not just as a way to help people make better decisions but also as a way to help government do more for less.

In 2010,Cameron set up the Behavioural Insights Team or nudge unit. Three years later,the team has doubled in size and is about to announce a joint venture with an external partner.

The unit has been nudging people to pay taxes on time,sign up for organ donation,stop smoking during pregnancy and give to charity — and has saved taxpayers millions of pounds in the process,said David Halpern,its director. Every civil servant in Britain is now being trained in behavioural science.

In fact,five years after it arrived in Washington,nudging appears to be entering the next stage,with a new team in the White House planning to run policy trials.

SUCCESS WITH SCOFFLAWS

At the core of nudging is the belief that people do not always act in their own self-interest. We can be undone by anxiety and swayed by our desire to fit in. Manipulating behaviour is an old hat in the private sector,where advertisers and companies have been nudging consumers for decades. One of the biggest successes involves tax payment. Inspired in part by a field experiment in Minnesota,Halpern’s team has helped test different reminder letters on hundreds of thousands of people who haven’t paid their tax bills. One nudge was a sentence telling recipients that a majority of people in their community had already paid their taxes. Another said most people who owe a similar amount of tax had paid.

Over the last financial year,the letters brought forward 210 million pounds of revenue,Britain’s revenue and customs department says —money that otherwise would have had to be chased in costly court procedures.

KATRIN BENNHOLD

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