Sunday’s NY Times business section has a great cover story on the British government’s application of behavioral economics: “The Ministry of Nudges”.
I had heard that David Cameron was a fan of “nudge” approaches to policy but hadn’t read much about it until now. It’s always interesting to hear of how ideas from academics you respect — like Richard Thaler of U-Chicago — end up being embraced by major government or business organizations. Here’s part of the story:
One morning in late May 2008, 10 copies of a little red book arrived for Rohan Silva in Norman Shaw South, the Westminster wing where the leader of the political opposition — at the time, the Conservatives — is traditionally housed.
The book was “Nudge,” and Mr. Silva, then 27 and David Cameron’s youngest adviser, piled them up on his desk. He had read the book as soon as it came out, a few weeks before. In fact, he had read deeply on behavioral economics and social psychology and met many of the American academics who specialized in the field. He was eager to spread the message in his country. “We used to joke about Ro being on commission for Thaler and Sunstein,” said Steve Hilton, Mr. Cameron’s former director of strategy and now a visiting scholar at Stanford.
Mr. Silva sat in a busy open-plan space. There was a lot of traffic, and the books went quickly. One day, Mr. Cameron picked up a copy.
“So this is the book you’ve all been talking about,” he said.
“Yeah,” Mr. Silva said. “You should read it.”
A week later, Mr. Cameron was quoting whole passages, and he, too, wanted to meet Mr. Thaler. “The really radical thing that Richard opened up to us is his concept of choice architecture,” Mr. Silva said in a recent interview. (He left Downing Street in July to start his own technology business.) “Governments have a set of nudges in everything they do, even if they don’t do anything. You can either be deliberate about it or not.”
In February 2010, three months before he became prime minister, Mr. Cameron gave a talk at a TED conference laying out his vision for a “new age of government.”
“If you combine this very simple, very conservative thought — go with the grain of human nature — with all the advances in behavioral economics,” he said, “I think we can achieve a real increase in well-being, in happiness, in a stronger society without necessarily having to spend a whole lot more money.”
Within weeks of Mr. Cameron’s taking office in May that year, the nudge unit was born. The team, which now counts 16 members, has run more than 50 experiments, often in fields that members know little about to start with.
The story has plenty for marketers, UX researchers and Lean Startup folks to like, including an emphasis on controlled experiments and getting out of the building and into the field.
Within weeks of Mr. Cameron’s taking office in May that year, the nudge unit was born. The team, which now counts 16 members, has run more than 50 experiments, often in fields that members know little about to start with.
Mr. Gyani, the psychologist, had never been inside a job center. He didn’t know that job seekers had to fill out as many as nine forms upon arrival at the center and then wait weeks to see an adviser while the forms were being processed. Until he met a man who had written 600 applications and received only four responses, he hadn’t fully grasped the demoralizing effect of a difficult job market.
There’s lots more in the full article, and it’s all pretty exciting.