When Government Nudging Is Ethical

The practice has become a regular feature in many cities’ data-driven initiatives, leveraging information gathered in randomized control trials to create evidence-based policies.

by Chris Bousquet, Data-Smart City Solutions / March 31, 2017
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This article was originally published on Data-Smart City Solutions.

Nudging — using behaviorally-informed measures to influence behavior — has proven to be an effective tool in government for encouraging residents to pay parking tickets, save money, and bring blighted properties up to code. Nudging manipulates people’s choice architecture, the physical, social, and psychological context that influences decision making,to promote preferred decisions. For example, one popular nudge involves changing the layout of grocery stores to make healthy foods more prominent, driving customers to buy and eat more healthily. The practice has become a regular feature in many cities’ data-driven initiatives, leveraging information gathered in randomized control trials to create evidence-based policies.

Its cost effectiveness is undeniable: most nudges are simple, cost little to implement, and can produce huge savings. However, some object to nudging on entirely different grounds, arguing that while effective, manipulating residents using behavioral science is unethical, or at the very least should remain outside the realm of government activity. They see nudging as a Big Brother-esque violation of citizens’ autonomy, encroaching upon freedom of choice.

However, universally favoring or opposing nudging both miss the point. Rather, just as with any other reform, some nudges are ethical and others are not: it is the content of a nudge, its goals, and level of transparency that determine whether or not it is ethical. While common objections to nudging appeal to citizen autonomy and concerns with government’s proper role in residents’ lives, nudging does not necessarily violate autonomy or overextend government any more than a law does. For example, is a calorie or sugar notice on a menu more or less objectionable than a law that taxes sugar?   Specific nudges may be overly coercive, but this reflects on those nudges only, not on behavioral prods as a whole. Furthermore, in some situations, it may be unethical not to nudge, as behaviorally-informed policy can fulfill democratic governments’ responsibility to reform ineffective laws and represent the wishes of the people.

Autonomy

Probably the most common objection to nudging is that it can violate citizens’ autonomy. This argument maintains that people should be able to make choices unfettered and free from external influence. Proponents of this argument may insist that, especially in a democracy, where individual liberty is a core value, other actors should not be in the business of influencing citizens’ decisions.

However, this common objection makes the false assumption that there exists such a thing as an unfettered decision. As Cass Sunstein—considered the father of nudges during his tenure as Administrator of the White House Office of Information and Regulatory Affairs under President Barack Obama—explained in an article for the Yale Journal on Regulation, “It is pointless to object to choice architecture or nudging as such. Choice architecture cannot be avoided. Nature itself nudges; so does the weather; so do customs and traditions; so do spontaneous orders and invisible hands.” In other words, nudges are inevitable, whether intentional or not. Citizens make every decision against the backdrop of a complex choice architecture. There’s no such thing as a neutral platform from which to make a decision, and therefore it makes little sense to object to nudges on the principle that they intrude upon citizens’ free choice.

Government’s Role

Yet even granted that nudges are inevitable regardless of government activity, the question arises of whether or not it is government’s place to nudge. Elspeth Kirkman of the Behavioral Insights Team (BIT)—the organization started in the British government committed to using behavioral science to inform policy—explained that some politicians and residents express “a non-specific objection to government changing people’s behavior.” However, as Kirkman countered, “This is what government does.” Virtually all laws are intended to change behavior, and most in a much more directive way than nudging. Few would object to government’s prohibition of things like theft or assault. Of course, citizens can and should object to specific nudges on the grounds that they are overly intrusive or not within the public interest, just as they should with certain laws. However, it makes little sense to object to nudging in principle simply because it influences behavior.

A potential objection to this argument may concede that influencing behavior is an important part of government’s role, but that nudges extend government’s influence to behaviors that we would deem unacceptable for the purview of laws. In other words, if you have to nudge to produce some behavior, it’s probably because a direct law wouldn’t be acceptable. By this reasoning, to say that nudging is acceptable because laws are acceptable is disingenuous, as nudging is often used to do the things we won’t allow laws to do. For example, residents would never approve a law requiring them to eat a certain number of vegetables in a day, but it would be plausible for a city to implement a nudge to the same effect, for instance a poster in the junk food aisle of supermarkets that displays how many vegetables you should eat in a day. According to this argument, nudges are unethical because they overextend government’s control to behavior that shouldn’t be controlled.

Importantly, however, changing residents’ choice architectures does not affect their freedom of choice, meaning nudges do not unethically extend government’s coercive power. As Sunstein explained at the Summit for State and Local Government in D.C. earlier this year, “The limits to nudging exist exactly where people know what they think.” Nudges do not change people’s preferences, but merely make beneficial choices more preferable or provide information to educate preferences. For example, you could never nudge people into donating to their least-favorite charity using an opt-out strategy—a nudge that requires people to opt out of, rather than opt into, a behavior. The added incentive of convenience would not be nearly enough to convince participants to donate. This is not to say that government should employ such a nudge, but serves to show that nudges cannot force people to do things that they do not want to do, but rather make it easier for people to do the things they do want to do.  

Others have argued that, while nudges are inevitable and not necessarily nefarious, nudges should come from the private sector only. According to this line of reasoning, with the power of market pressure, citizens exert more influence over the actions of private companies than they do over government initiatives. If citizens don’t like what a company is doing—for example, some piece of advertising that is particularly manipulative—they can stop buying products from that company.

The problem with this argument is that often, citizens are not aware that private companies are nudging them. In many cases, that is actually the point: companies implement nudges with the hope that citizens unknowingly buy more of their product. On the other hand, according to Richard Thaler— Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business and prominent proponent of nudges—governmental nudges are in general much more transparent, likely due to local, state, and federal government transparency laws. As a result, citizens can actively challenge any nudge that they find problematic through the democratic process, by criticizing or voting out the regime that implemented the nudge. In other words, transparency forces government to implement ethical nudges.

And, as a piece of public policy, government nudges must pass public scrutiny. Unlike corporations, which can justify nudges merely for the sake of profit, governments have an obligation to pass initiatives in the public interest, as determined by public officials and citizens. Nudges from a democratically-elected government are therefore often preferable to private sector nudges because they are more transparent and intended to benefit public welfare.

The Obligation to Nudge

In some cases, it may in fact be unethical not to nudge. Nudging has proven itself an effective policy tool for reforming inefficient and even unethical practices. For example, in an effort to improve recycling rates, Edinburgh reduced the size of the trash bins distributed to citizens. In doing so, the city increased recycling by 85 percent. In this case, choosing not to nudge and thereby allowing the city’s anemic recycling rate to persist might be considered unethical. By instituting a nudge, the city fulfilled its ethical obligation to protect the local environment and those living in it.

It is also worth noting that in general, nudging enjoys widespread support among American citizens. In a study by Cass Sunstein analyzing support for five nudges—(1) mandatory calorie labels at chain restaurants; (2) mandatory graphic warnings on cigarette packages; (3) a mandatory “traffic lights” system for food, with green, red, and yellow labels indicating healthiness; (4) automatic enrollment in savings plans; and (5) automatic enrollment in green energy providers —nearly 96 percent favored calorie labels, 71 percent favored graphic warnings, 57 percent approved of traffic lights, 77 percent approved of automatic enrollment in savings plans, and 75 percent favored automatic enrollment in green energy. Of course, just because most people approve of certain nudges does not necessarily mean these nudges are ethical. However, in democracies, which claim to draw their legitimacy from the people, the degree to which citizens support an administration’s policies itself becomes an ethical consideration. Democratic governments therefore have some responsibility to implement certain nudges in order to represent the will of their citizens. While doing citizens’ bidding is not the only obligation of democracies and must be weighed against other considerations, popular approval of certain nudges adds to their ethical weight.

Because nudging preserves freedom of choice and fits within the proper roles and responsibilities of government, nudges are ethical when transparent and beneficial to the public interest. However, this is certainly not to say that all nudges should be allowed. Cass Sunstein gives the example of a rule that would require citizens to opt out of voting for an incumbent candidate in a presidential election. Technically, such a rule would qualify as a choice-preserving nudge, as citizens could still choose to vote for another candidate. Yet, Sunstein maintains that this rule would violate democratic norms and should therefore be rejected. As with any other reform, nudges should undergo careful scrutiny to determine their effectiveness and ethical implications. This process should involve not only randomized control trials that produce data on nudges’ efficacy, but also examination by agency heads or legislators of nudges’ intrusiveness and compatibility with local values and norms.