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Nudging the way to better public policy
Nudging helps policymakers learn what works and what doesn’t.(File Photo: justin beck/Unsplash)
In 2013, Rotman School of Management professor Dilip Soman argued governments should use a behavioural approach to design public policy. Building on the concept of “nudging” introduced by Richard Thaler and Cass Sunstein, Soman suggested this approach could lead to real policy change. Nine years later, we can see how this approach appears to be working in the design and implementation of public policies across Canada. This is why policymakers should consider using it more frequently.
The idea behind nudging is simple. By creating a “choice architecture” – simple, beneficial options that people can opt in or out of – policymakers can improve access to public services and help people achieve their goals in life. Nudging makes it easier for people to get what they need from government without taxing their time and energy.
Key to this approach is finding small tweaks with big impact, backed by scientific methods like randomized controlled trials (RCTs). Nudging helps policymakers learn what works and what doesn’t.
It’s an easy idea to get behind. Too often, citizens find that interacting with government challenges their patience and sucks up their time. Renewing a driver’s licence should take a few clicks on a website – not hours in line at an administrative office staring at walls painted “greige.”
Many Canadians might wonder if service delivery could be improved. It can – and nudging is a mechanism that can lead to improvement. In recent years, governments have shown their ability to improve the service experience, reduce burden on citizens and increase uptake of important programs.
Consider organ donation. Survey data shows that 90 per cent of Canadians support organ donation. Yet uptake is dismally low for this critical, life-saving act – just 32 per cent of Canadians are registered donors. In Ontario, a complicated enrollment process meant that many residents didn’t know how to sign up, or simply forgot to do it. In 2016, Ontario’s “nudge unit” worked with Service Ontario to insert a prompt in the health card renewal process. The nudge considerably enhanced uptake.
The benefits are clear, but the politics aren’t always so simple. At its best, nudging can help citizens access public services. This is especially important for those who have been marginalized or excluded by government.
But concerns about the ethics of nudging are well documented, with particular attention to the idea that well-intentioned interventions could give way to outright manipulation. Further, some of the issues that nudging touches can be viewed as political such as organ donation, vaccine uptake and recruitment for the Canadian Armed Forces.
In recent years, nudging has given way to a more structured approach: the application of behavioural insights (BI). BI relies on expertise in public policy and behavioural science and recognizes that data-driven experimentation isn’t always the first-best option. If nudging improves policy implementation, BI goes that extra step to include policy design – doing the work in advance to ensure citizens can access services without wasting their time and energy.
One strength of BI is its transparency. It makes clear assumptions, and its proponents are committed to testing those assumptions through rigorous evaluation. Earlier this year, BI practitioners collaborated with researchers from Berkeley. Together, they published the results of 126 studies covering 23-million individuals. In a world of scientific uncertainty and mixed results, they found strong evidence that behaviorally informed public policy can work. Overall, nudge interventions improved target behaviours by eight per cent.
In real terms, this results in social and economic benefits. When it succeeds, BI can help citizens avoid feeling regret from making under-informed or myopic decisions based on intuition and emotion, rather than deliberation and reasoned analysis. When it fails, it provides quality evidence for policymakers to find alternatives – and quickly.
What does BI in Canada look like now? Since Soman’s piece was published in Policy Options in 2013, the federal government has introduced the Impact and Innovation Unit (IIU) in the Privy Council Office. The interdisciplinary team consists of policy experts with a variety of educational backgrounds ranging from education to neuroscience. The stated goal of is to reduce barriers to innovation within government and to “leverage the benefits of impact measurement to support evidence-based decision-making.”
While the IIU works in tandem with other departments on a contract basis to pilot and implement RCTs around discrete policy problems, small BI enclaves have also emerged in other departments such as Immigration, Refugees and Citizenship Canada and Canada Revenue Agency. The IIU also supports a broader agenda around policy innovation and responsiveness with projects such as the Impact Canada Initiative and COVID-19 snapshot monitoring (COSMO).
At the provincial level, the governments of British Columbia and Ontario have also established BI units – the former within the B.C. Public Service Agency and the latter in the Treasury Board Secretariat. Similar work (though not a standalone unit) was found in Alberta’s CoLab (though the unit was dismantled in 2020).
Together, provincial and federal ministries have reported 59 BI trials (see Figure 1) with many more in the works. The majority (39 out of 59) of the trials fall into one of three policy areas: government operations, health, or social welfare.
Cities have also taken up the challenge with projects like City Studio (Vancouver) or Civic Innovation (Toronto) that focus on improvements to service delivery and increasing citizen participation.
Governments aren’t the only actors in the BI game either. The Canadian Behavioural Insights Team (BIT), established in 2014, emerged from the original “Nudge Unit” in the British government, which was founded in the Cabinet Office in 2010. It uses a consultancy model to support government and the not-for-profit sector to support BI policy interventions.
BIT is a major player. It has offered advice and conducted hundreds of RCTs in policy domains ranging from health and social policy to natural resources and government operations. In 2019, BIT opened its first Canadian office, headquartered in Toronto. Since then, BIT Canada has helped lead pathbreaking work on tax benefit claims, employment services and other pressing issues.
One of the interesting features of BI in Canada is the collaborative approach embedded in BI units. Not only is the work indicative of the many cross-cutting relationships across government, but it highlights the ability of government and academia to form meaningful partnerships. They bring together a variety of financial and human resources to drive evidence-based policy change.
Chief among them is the relationships BI units have formed with academics. They include the Behavioural Economics in Action at Rotman and the Decision Insights for Business and Society teams.
Looking at the context of nudging in present-day policymaking, it appears we may have arrived at a new equilibrium. Some were skeptical about nudging. There are concerns that it’s threatened to overtake policymaking with novel, experimental methods or that it would be used unethically to trick people or undermine their self-interest. There are also concerns that it would somehow cheapen or gamify policy development.
However, BI now occupies a useful, if modest, place among policymakers’ tools. We consider this success not just in the number of BI units, but in its incremental application across policy areas where the tool is well positioned to improve policy design and implementation.
As Soman noted, the behavioural approach to public policy is reflective of a set of guiding principles for policymakers even if a “grand unified theory” is not yet on the books. But perhaps one is not necessary. Nudging has grown – perhaps not prolifically – but it now appears to be an accepted tool to promote policy compliance and enhance policy uptake.
This article first appeared on Policy Options and is republished here under a Creative Commons license.
