NUDGING, SHOVING, AND BUDGING: BEHAVIOURAL ECONOMIC‐INFORMED POLICY

Abstract

In recent years, behavioural economics has gained considerable traction in the policy discourse, with a particular conceptual framework called libertarian paternalism, which informs nudge policy, dominating. Libertarian paternalism requires policies to protect individual liberty, to be focused specifically upon improving the welfare of those towards whom the intervention is targeted, and to be informed by the findings of behavioural economics. In practice, however, many of the interventions that are being advocated as nudges do not meet all of these criteria. Moreover, libertarian paternalism is not the only framework in which behavioural economics can inform policy. Coercive paternalism and behavioural regulation, frameworks that respectively underpin shove and budge policies, both use behavioural economics to inform public policy, and both face their own set of limitations. This article attempts to bring a degree of intellectual clarity to the potentially important contribution that behavioural economics can make to public policy.