FEATURE4 September 2015

A nudge in the right direction

Behavioural economics News Public Sector UK

David Halpern, chief executive of the Behavioural Insight Team (BIT) is a behavioural economics (BE) evangelist. And the publication of his new book Inside the Nudge Unit – How Small Changes can make a Big Difference means he can spread the BE word.

“If governments want to use these approaches they have to be open and transparent. We want to spread our approach and explain it in simple terms,” he explains.

While the successes of BIT are much lauded now and constantly referred to in BE circles he explains that it wasn’t all smooth sailing.

“A lot of the challenges pre-date the team. I worked for Tony Blair for six years and wrote about using behavioural approaches in policy. It was a disaster in terms of the media reaction. The storm that blew up – we were criticised that it was the ‘nanny state on speed’ – that was seared on my soul.

“So, it was by no means guaranteed this [BIT] would be a success – either in the results or the way it would be perceived by the media. It was good that we could assemble the right political support and get results to show Whitehall,” he says.

While its work on tax is often the most cited, for Halpern it’s BIT’s work with the Job Centre that stands out. “We didn’t know if it would work but the result is that we got people back to work faster and there have been even stronger results since in Australia and Singapore. Why wouldn’t you want to do that? It was such a nice story.”

A more recent – and somewhat contentious – example is on the use of e-cigarettes.

“Some in the health service were very worried about e-cigarettes. The UK is the most liberal place in the world with its attitude to sales of them. It wasn’t a RCT [randomised control trial] but behavioural literature on substitution suggested the government was heading to the wrong side of the argument.

“So it was a battle to say this is the way to take it. But more than one million extra smokers quit as a result of e-cigarettes – what would you pay for a drug that could do that? It’s never perfect – there are counter-arguments. There’s the precautionary principle (it’s a risk, so don’t do it) but you need to look at the balance of risks. It’s much easier to drive substitution than abstention. And e-cigarettes are your best chance in generations to have a discussion about getting rid of cigarettes.”

And he thinks that the use of RCTs has changed how politicians think.

“It’s made credible – almost popular – the experimentation approach as it’s so part and parcel of the behavioural approach. To incorporate experimental methods into policy is a game-changer – it’s phenomenal. There are constant media stories on government experimenting on us and how terrible it is – what’s the alternative? That government stumbles on something?”

Not that Halpern doesn’t have some concerns about spreading the BE word wider. “My fears are that you get an over-use of the approach. Also if you put the knowledge out there it can be used for either good or bad,” he says.

Looking forward, Halpern thinks the challenge for the BE community is one of scale-up and how BE can be used for things such as extremism or productivity.

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