Behavioural Economics and Economic Policy: A Comparative Study of Recent Trends

Abstract

This paper discusses the influence behavioural economics has had on economic policy over the past few years, and also tackles the question of what developments in the near future are likely to look like. To do so, the paper illustrates three exemplary cases, the United States, the United Kingdom and Germany, by first listing major policy implementations of recent years which bear a distinct touch of influence by behavioural research, and then taking a closer look at the background and expertises of important policy makers’ advisory boards. The main research goal is to provide a comparative assessment in order to answer the question of whether or not behavioural economics has gained in importance in economic policy (advice) over the past decade, and whether, given the present state, this development is likely to continue. The paper concludes that behavioural economics has indeed found its way into economic policy quite rapidly, but this is not true unanimously: countries such as Germany show a very different development from the United Kingdom and the United States, two of the forerunners of building on behavioural research, in this respect. It is also argued that, although policy advice does of course not necessarily translate into actual implementation, given the interest in behavioural economics and related topics especially in important international institutions (the OECD, World Bank etc.), this overall trend is likely to continue.