Business News/ Politics / Policy/  Nudging India forward: Setting up a nudge unit

Part 1 of this series dealt with the rationale for a nudge unit in India, where we saw examples of how public policy in countries like Israel and Singapore have harnessed the use of behavioural science. In part 2, we highlighted specific economic and social problems in India which policy can address by nudging people to take more socially optimal decisions. In our concluding piece of the three-part series, we wish to assess practical and ethical hurdles of constituting a nudge unit and what its mandate should be.

Public policy oriented behavioural science, led by the seminal work of Richard Thaler and Cass Sunstein (‘Nudge’) and others, argues that subtle changes to the choice environment of individuals can motivate them to take better decisions without impeding their economic incentives and choices. As David Halpern, author of Inside the Nudge Unit and CEO of the Behavioural Insights Team, puts it, “It’s rather important, if you conclude that this stuff is potentially pretty powerful, to ask who is nudging the nudgers?" While there has been much discourse relating to the utility of this relatively-novel area of policy design, there is little consensus on the why and how of nudging.

Observing the various nudge units set up so far, and considering the fact that the intent of such a unit is to impact public policy, it is easy to see that the government (in some form or the other) is inextricable from the nudging process. While these concerns are not meant to be comprehensive, they are certainly issues that ought to be delved into before setting up a nudge unit.

The state as a ‘Nudger’

Consider the idea that “Individuals may be far too burdened by the number of choices to be made, and therefore, they might be better off for a ‘nudge’ from the government in the right direction." (An idea suggested by the ‘Scarcity effect’ of Harvard Economics professor Sendhil Mullainathan and Princeton psychology professor Eldar Shafir). This line of reasoning rests on the strong assumption that a) the state can objectively assess what is the “right direction" b) It has a better capability to make this decision than the individual b) the state is transparent and c) will always act in favour of the individual.

What happens when government interests are not aligned with public ones? For instance, consider some of the examples discussed in Part 2 of these series like using nudges to improve polling rates. Clearly, the ruling parties may have an incentive to selectively implement such a program where they are known to have a vote bank. A nudge in the direction of vested interests is not an unlikely threat, given the access to individuals’ minds that social media gives to any popular political person. That is, such an effort would not work in the absence of adequate monitoring systems to ensure commitment and autonomy from political influence.

Secondly, the idea of “reinforcing the minority norm" with regard to good behaviour like paying taxes or littering may prove to be difficult in contexts where these behaviours are not widely practised social norms. In fact, it is important to question and reassess the validity of behavioural science experiments in the Indian context to account for cross-cultural differences.

But that is precisely what a nudge unit could be responsible for; bringing the experimental method to public policy and generating good quality research on “what works" in the Indian context. Advocating these findings would be subsequent to providing results on their potential impact.

Moreover, such an organisation could also be mandated to reveal the way in which choice architecture is currently abused, even by the state. Subliminal advertising/marketing has been around for decades and has been only getting more and more difficult to detect, disguised as notifications on your favourite social networking websites. Understanding the ways in which consumers are currently influenced away from their best interests is a much needed research domain (that is not in the corporate interest to finance).

The nudge perhaps also makes great sense in a scenario where there is a harm principle. For instance, nudging has been used effectively in the UK to curtail pornography by making it incredibly hard to access. However in the Indian context, the purview of the nudge unit becomes critical. Given that, it demands a high level of trust and transparency in the government and its ability to make the right decision.

The case for nudging as an experiment

Can the nudge unit then be set up on a pilot basis? When it comes to public policy, the dialogue around growth and development often takes on polarised points of view: it’s always aid vs. no aid, microfinance vs. no microfinance, growth vs. redistribution. While these un-contextualised debates serve the purpose of outlining potential challenges/conflicts for achieving economic development, to dismiss a policy outlook as being universally incorrect is problematic. A nudge unit seems worthy of a trial in the Indian scenario.

If the proposed nudge unit were to function as an unbiased entity, then it would potentially be able to highlight (through empirical research) not only about which nudge works best, but also which cause is suited for nudging. For example, when the Save More Tomorrow programme was launched in the US, it came out of the realisation the people wanted to save but weren’t able to do so.

In short, the focus and direction of nudges should be influenced by individuals’ ideas and concerns about their own behaviour. Who would not like to save more, eat healthier or save electricity? For instance, policies utilising behaviour change communication (BCC; a common tool to promote positive health practices) to improve eating practices for pregnant women may be implementable.

Ultimately, the terms of reference of a nudge unit would do well to perhaps not engage in politics or political behaviour in any way, given that this is a highly contentious issue in the Indian case. Further complicating any political behaviour are caste-based social norms and preferences—something that may require a more sustained effort to overcome. For example, attempting to change the policy on manual scavenging may be met with resistance as this problem is intertwined with casteist notions.

Some suggestions on structure and functioning

Interventions which can have the most impact are those directly falling under the aegis of the government—central (like Swachh Bharat Abhiyaan), state (like PDS pricing), or local (pothole fixing). Therefore, if a unit was warranted to design such interventions, it would be most efficient for it to be closely linked to the government—perhaps because collaborative ownership within the government implies a better chance of implementation. An industry association that offers advice may be an attractive option, while another form of entity is the ‘boutique consultancy’. An NGO/Section 25 company and the like may have reporting and filing costs that the former don’t, pointing towards a robust industry association that can liaise with all stakeholders easily. It is also worth considering the mix of ownership of the nudge unit (like the Behavioural Insights Team) so that it can operate as an independent think tank and advisory while avoiding conflict of interest.

The legal constitution of the organisation is an essential factor in its transparency and ethical considerations. That is, as Halpern answers his own question, “The nudger has to be nudged by the public". Sharing results with the public and obtaining their permission is a prerequisite for implementation. Undue influence is also best prevented by ensuring that both the unit’s research and its consequent programmes are continuously shared with the public.

Given that the state has several competing policies in place that may distort the potential effects of nudging (for instance, subsidies), a nudge unit may not make policy implementation (or policy evaluation) any more efficient even if it expands the current toolset considerably. However, before a nudge unit can be set up, as citizens and public intellectuals, we ask ourselves if our government is the best candidate to operationalise such a thing. If we can’t trust the government, which is democratically elected, to make such choices, then we need to go back to first order questions of what a government can do.

Sneha Menon is co-founder at InsightsApplied and is currently pursuing an M.Phil in Economics in the UK.

Anirudh Tagat is Research Author, Department of Economics, Monk Prayogshala, Mumbai.

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Updated: 08 Mar 2016, 01:21 AM IST
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