The master of nudge

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The idea of implementing subtle psychology to encourage people to alter a behaviour is not a new one. In the 1700s, Frederick the Great of Prussia soon realised that using threats to try to push the population into switching from grains to potatoes – to alleviate his cereal shortage – was not working. So he ditched the warnings that he would cut off the noses of people who didn’t plant potatoes and, instead, set up an armed guard around his own potato fields. Before long, people were sneaking in to steal the crop and plant their own tubers – and potatoes had become a staple. 

Today, persuasion is viewed as a science and, in the UK, David Halpern has been at the forefront of its adoption in policy-making. As CEO of The Behavioural Insights Team (BIT) – set up by Prime Minister David Cameron in 2010 and often referred to as the Nudge Unit – Halpern has been putting the principles of behavioural insight into government.

His recent book, Inside the Nudge Unit – How small changes can make a big difference, chronicles the setting up of this unit, case studies of its work and how its findings have been adopted around the world (as well as sharing stories such as that of Frederick of Prussia).  

A Cambridge academic, Halpern moved into the world of policy in 2001, working for Tony Blair’s Labour government in the strategy unit. But the more widespread adoption of behavioural science principles really took off under Cameron. So does ’nudge’ naturally fit better with a Conservative doctrine?

“Like any tool or knowledge, you can use it in many different forms and for different political purposes,” says Halpern. He points to its uptake by governments of varying political persuasions, from Barack Obama in the US to Angela Merkel in Germany, so doesn’t believe it suits one ideology more than another.

“It was more difficult for Blair to do it,” he says, pointing to how the former Prime Minister was expanding the size of government – both fiscally and in terms of its reach and activity – through laws, which meant it was already subject to the charge of being a ‘nanny state’. 

Perfect storm

“For many kinds of reform, it’s the unexpected party that can move it forward,” Halpern explains. “If you’re in the context of a centre-right government, which is generally trying to make the state smaller and deregulate, it gives a very different tone when you say we’re going to use these behavioural techniques. In that sense, it did make it politically easier to pursue.”

So has austerity created a perfect storm in terms of the need to achieve results with minimum – or vastly restricted – budget? “It focused minds,” he says. “You had a government that was generally deregulatory in its instincts and departments were subject to cuts. You would think, when government is flush with money, that that’s the time of great innovations – but in government and in business, often it’s when you’re more fiscally constrained that you have to stop and think. When you get more money, you generally do more of the same thing.”

Rather than conservative ideals or global recession, however, Halpern thinks one of the crucial factors in the BIT being established was that people within government were ready to champion it – Steve Hilton, the then director of strategy for Cameron, and cabinet secretary, Gus O’Donnell, in particular. 

Halpern now appears entirely comfortable with the world of politics, and effortlessly maintains a balance between watching what he says, name-dropping just enough for suitable import, and giving entertaining, storytelling detail about how BIT unfolded. 

Inside the Nudge Unit is bursting with examples of BIT’s work across government departments, and some of the case studies have become the stuff of behavioural economics (BE) legend. Indeed, it’s nigh on impossible to sit in a BE conference session these days without hearing about how changing one line of an HMRC letter to people owing tax – to ‘nine out of 10 taxpayers pay on time’ – increased repayment rates by about 4.5%, and brought forward tens of millions of pounds. 

So while the tax-repayment nudge is the BIT’s most talked about, what work is Halpern most proud of?

“Getting people back to work faster was interesting, and we were very uncertain whether it would do anything. Not only did we show it was effective, it’s now national government policy. We’ve replicated versions of it in Australia and Singapore with even bigger effects. It’s very hard to argue against; why wouldn’t you want the Job Centre adviser to be more effective and to help people get into work faster?” he explains.

This example involved relatively wide-ranging changes, including an ‘implementation intention’ approach; rather than advisers asking jobseekers what they had done in the previous week to find a job, they asked them what they would do next week, and required them to write down their plans in a diary-like booklet. In the initial test, 60% of jobseekers who went through the new procedure were off benefits at 13 weeks, compared with 51% of the control group.

The other example Halpern cites relates to police recruitment. It stemmed from the fact that when potential new police recruits sat the online exam, the pass rate was about a third lower for ethnic minority candidates than white ones. The discrepancy was much discussed, but the BIT employees thought motivation and expectancies might be an issue. 

As a result, they tested adding an extra line – just before the applicants clicked through to the test – asking them to reflect for a moment on why they wanted to join the police, and why it mattered to their community. The prompt made no difference to the white applicants, but the ethnic minority pass rate rose considerably.

“I think it is genuinely stunning, that changing one line can move the pass rate for ethnic minority candidates from 40% to 60% – basically closing the gap,” says Halpern.

There is certainly plenty to be proud of there; however, one criticism levelled at BE is that – despite its name – it isn’t actually science or economics, but rather communications. 

“There is a comms element to all we do, if you’re trying to persuade someone of something it will involve communication,” Halpern says. However, he adds that BE’s image is often skewed, as the examples that are most talked about tend to be comms ones, because they are easier to explain – like the tax letter.

“It’s much more complicated to explain how we’re going to rework what happens in a job centre and what the adviser is going to say – and that you have to change the behaviour of the adviser to influence the behaviour of the job seeker. That is clearly not marketing and comms in a narrow sense, and a lot of our activity is in that area,” he says. “Similarly, a lot of our work is on fundamental policy design, trying to understand and market how a service operates through a sophisticated behavioural psychological lens – which could lead to very different policy conclusions.” 

As the wealth of knowledge and understanding builds within the unit, its expertise has been increasingly used across disciplines. “We often import an idea and effect from one area and think it would work in another. Nowadays, because we help other governments and public bodies, it also happens cross-nationally.” 

One of the reasons the work can be shared so readily across countries is that key phenomena operate generally – something, Halpern says, they didn’t know five years ago.  

“For instance, on social norms – everywhere in the world people are influenced by what other human beings are doing. The basic dynamic is pretty close to being universal.” 

He cites work for the World Bank in Guatemala – a country “which has low tax morale”. Halpern explains that they weren’t sure if the UK tax work would replicate; there were so many differences, from the difficulty of sending a letter when people don’t have house numbers or letter boxes, to the change of language, and the fact they couldn’t say nine out of 10 people pay their tax on time – because in Guatemala they don’t. 

“Nonetheless, we see very similar patterns of results. The second-best intervention – which increased the payment rates four-fold – was essentially a social-norm message saying 61% of people do pay this tax – because that was still surprising in Guatemala.”  

While it’s easy to herald the successes of this type of work, it’s important to recognise that – as in all areas of science – experiments do not always go to plan. In 2006, the psychology professor and author, Robert Cialdini, gave a seminar to Downing Street and talked about how policy-makers sometimes inadvertently use social norms to influence in ways that backfire. For example, a knife-crime campaign could end up communicating the message that most young people carry knives. 

“Cialdini called it the big mistake, because you want to make a big fuss and inadvertently signal it’s widespread – so you make it more likely – behaviourally, it can be counterproductive,” says Halpern. “Or, on gender issues, people say ‘it’s terrible there aren’t more women on boards’ – but you’re also saying ‘OK, it’s normal then; we’re no different from anyone else‘.”

Halpern believes it’s vital that, in the process of making government more empirical, to share all the results of the experiments – both successful and less successful. 

“We did something recently – inspired by some work at Portsmouth – where you show people a picture of their house with all the energy leakage. In the lab, it worked pretty well; when we ran it as a true trial, it didn’t work. 

“Imagery is complicated; it can create dilution effects, so you don’t look at the other stuff – and it can have layers of meaning that you might not be aware of.”  

Behaviour-based segments

The aspiration to share information and be more transparent is admirable, but it means everyone can access it, regardless of their motivations.

“Most knowledge you can use either for good or bad,” Halpern says. “One of the reasons governments are drawn into this is because people are being nudged all the time by businesses to drink or eat this, that and the other – so it’s really important that our regulators understand this.”

BE principles have been adopted to varying degrees by marketers, with the market research end of the spectrum particularly receptive. But behavioural science can be challenging to some of the established thinking. For instance, in his book, Halpern compares the value of some forms of segmentation (sociodemographic) to being as much use as a horoscope, and argues instead for behaviour-based segments.

“It’s not ideological – it’s empirical. Certain kinds of traditional segmentation feel very plausible [hence the link with horoscopes] – and you can go to a meeting and say there’s this type and this type – but you don’t test. So is it really true that those segments respond differently to a different message or intervention?

“We are generally sceptical about a priori segmentation; on the other hand, segmentation per se can be enormously powerful,” he says. 

“In the example of tax, the social-norm message works incredibly well for 95% of the population. It doesn’t work on the 5% of the population with the biggest tax debts; in fact, it backfires – and the top 1% are less likely to pay when they receive the message that most people pay their tax on time. 

“Can we work out what message will work on those guys? It turns out it’s: ‘if you don’t pay your taxes, we can’t pay for schools and hospitals’. Behaviourally driven segmentation is consequential in relation to your lever.  

“Because of many statutory bars and other practical issues, government can rarely do that kind of segmentation. Even on the organ donation trials, we have no information about who responds to what message – there’s no way we can connect that data. It’s partly what’s written into statute in our data laws.” 

One thing that is increasingly being debated in BE circles is whether it can be applied to much bigger problems, such as social exclusion, obesity, mass immigration, radicalisation… the list could go on. While Halpern wouldn’t claim to have all the answers to the world’s woes, he is interested in how it can help us to understand why individuals don’t make simple behaviour changes that could significantly improve their outcomes – whether it is saving money, moving to an area with better employment chances, or concentrating in class.

“A rational economic model is struggling to understand what’s going on – there’s something happening with people’s emotions. A lot of our models haven’t been anywhere near sophisticated enough to understand those processes. I think a more nuanced account of human behavioural psychology can enable us to work out what the key causal pathways are, and help us develop more focused interventions.”

Halpern has long since left academia behind, but his ideal would be to straddle the fields of higher education and government. “At its best, the policy world embodies really good scholarship too,” he says. “Understanding how the world is, and drawing on evidence – I’ve always been interested in the ‘so what?’ question – why does that matter? Why is that consequential for society or the world? I think the most theoretically interesting spaces are often those where you test your theory in the real world, which is a tough environment – and you learn a lot from it.”