Can nudges improve government?
Behavioral “nudges” can increase college enrollment by low-income students, boost health insurance take up, encourage federal workers to save for retirement, cut delinquencies on student loans, reduce vendor fraud, and save paper, according to the first annual report of the White House’s “nudge” unit.
President Obama established the unit—officially known as the Social and Behavioral Sciences Team (SBST)—to use insights from psychology, behavioral economics, and other decision sciences to improve federal programs and operations. Those social sciences increasingly appreciate what regular folks have long known: people are imperfect. We procrastinate. We avoid making choices. We get confused and discouraged by complex forms. We forget to do things. We sometimes lack the energy to weigh decisions thoroughly, so we act based on what we think our peers do or how choices are framed. And we sometimes cut corners when we think no one is looking.
Changing how people engage with the choices they face—“nudging” them—can reduce those imperfections and substantially affect their decisions. The SBST is exploring how that insight can improve government activities. To date, it’s completed more than 15 pilots exploring such questions as:
- Can prompted choice and sending reminders increase service-member participation in employee retirement plans? Yes.
- Can personalized text messages reduce “summer melt,” the failure to enroll of low-income students accepted to colleges? Yes.
- Can reminder emails reduce student loan delinquencies? Yes, modestly.
- Can a simple change to a form reduce vendor low-balling of the fees they owe the government? Yes, a bit.
- Can redesigning a collection letter increase debt recovery? No, at least not the letter that SBST tested.
- Can notifying doctors that they are especially high prescribers of controlled substances reduce inappropriate prescriptions in Medicare? No, but SBST is trying new notifications.
- Can a pop-up box get employees to print double-sided rather than single-sided? Yes.
These examples run the gamut from the life-changing to the almost trivial. But they illustrate a common theme: details matter. Policy debates usually focus on high-level issues. Should health insurance be offered on exchanges? Should student loan repayments be limited as a share of a borrower’s income? But after such issues are settled, their impact depends on how policies are implemented. The nitty-gritty of designing forms, deciding how and when to prompt people, and framing and communicating options really matter.
The SBST’s first year also demonstrates the importance of testing new approaches before rolling them out at large scale. It isn’t enough to recognize that particular nudges can influence people. Where possible, agencies should test different approaches to see how they work in specific circumstances. Letters comparing your behavior to your peers’ may encourage people to conserve electricity and pay their taxes, for example, but as one pilot found, that doesn’t mean that they will get doctors to prescribe fewer opioids.
On Tuesday, President Obama signed an executive order making the SBST a permanent part of the White House and directing government agencies to use behavioral sciences to improve their programs and operations. That move is consistent with a larger, bipartisan effort to bring more evidence to bear on the design and implementation of federal programs. The government shouldn’t operate in the dark when there’s an opportunity to use evidence to make programs more efficient and effective.
That potential comes with responsibility, however. One of the most important lessons from behavioral science is that framing matters. Government nudges are a perfect case in point. I’ve been characterizing the SBST’s efforts as “pilots” and “testing new approaches” to improve government activities. Those words are innocuous or positive. As a recent headline illustrates, however, this effort can also be characterized as “President Obama Orders Behavioral Experiments on American People.” That sounds much more ominous.
That characterization reflects concern about the goals of government nudging and the oversight of experiments. Are they really trying to improve our government and lives? Or are they manipulating us to do whatever Uncle Sam wants?
The most effective response is transparency. Tell the American people about the experiments, their goals, and their results. The SBST deserves good marks on that dimension. Its first report provides a good deal of information about each of the pilot studies, both the successes and the failures. As behavioral approaches spread, the government should build on that transparency to ensure that policymakers, media, and the public have the evidence they need to judge their merits.