Nudging Europe - Why the EU Should Embrace Behavioral Research into its Policy-Making
Alberto Alemanno
HEC Paris - Law Department
European Voice
Abstract:
In recent years, findings in behavioural sciences have highlighted the complex cognitive framework in which people make decisions. In particular, behavioural research, by refuting the neoclassical assumption of human full rationality, has revealed a set of psychological biases capable of explaining why too often people make choices that seem to go against their best interests. These findings have important implications not only for the well-being of European citizens but also for regulatory policy. While advertisers and marketers have for years exploited these patterns of irrationality to promote sales, public authorities are new to the game. Under both US President Barack Obama and UK Prime Minister David Cameron, policymakers have recently been encouraged to draw on behavioural and social-science insights in the design or implementation of new regulations, an approach commonly called ‘nudge'. Although the results of the first nudging experiments are mixed, there seems to be an emerging consensus around the idea that regulation cannot work effectively or efficiently if regulators do not consider how people respond. Besides a few isolated initiatives displaying some behavioural consideration (eg, revision of the tobacco products directive, consumer information regulation, behavioural advertising), the EU has not yet shown a commitment to integrating behavioural research into its policymaking. Given the potential of this regulatory approach to produce effective, low-cost and choice-preserving policies, this seems inadequate, especially given the EU's commitment to smart regulation, a commitment stated in its Europe 2020 Strategy. This article argues that one way to take seriously the findings of behavioural research would be for the European Commission to introduce a behavioural test into its regulatory impact-assessment system.
In recent years, findings in behavioural sciences have highlighted the complex cognitive framework in which people make decisions. In particular, behavioural research, by refuting the neoclassical assumption of human full rationality, has revealed a set of psychological biases capable of explaining why too often people make choices that seem to go against their best interests. These findings have important implications not only for the well-being of European citizens but also for regulatory policy. While advertisers and marketers have for years exploited these patterns of irrationality to promote sales, public authorities are new to the game. Under both US President Barack Obama and UK Prime Minister David Cameron, policymakers have recently been encouraged to draw on behavioural and social-science insights in the design or implementation of new regulations, an approach commonly called ‘nudge'. Although the results of the first nudging experiments are mixed, there seems to be an emerging consensus around the idea that regulation cannot work effectively or efficiently if regulators do not consider how people respond. Besides a few isolated initiatives displaying some behavioural consideration (eg, revision of the tobacco products directive, consumer information regulation, behavioural advertising), the EU has not yet shown a commitment to integrating behavioural research into its policymaking. Given the potential of this regulatory approach to produce effective, low-cost and choice-preserving policies, this seems inadequate, especially given the EU's commitment to smart regulation, a commitment stated in its Europe 2020 Strategy. This article argues that one way to take seriously the findings of behavioural research would be for the European Commission to introduce a behavioural test into its regulatory impact-assessment system.
Number of Pages in PDF File: 1
Keywords: Nudge, Regulatory Impact Assessment, Libertarian Paternalism, EU Law,Full text available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2061675
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