Day 36 – Q 1.In India’s public policy discourse, examine the rationale behind putting more emphasis on behavioural nudging.

1. In India’s public policy discourse, examine the rationale behind putting more emphasis on behavioural nudging. 

भारत के सार्वजनिक नीति प्रवचन में, व्यवहार परिवर्तन पर अधिक जोर देने के पीछे के तर्क की जाँच करें।

Introduction:

The Economic Survey has advocated the use of the behavioural economics concept of ‘nudge’ to encourage desirable social and economic change in the country. The Survey recommends that the proposal to set up a behavioural economics unit in the NITI Aayog must be immediately activated.

Body

Nudges are an outgrowth of the important field of behavioural economics, for which Richard Thaler won the 2017 Nobel Prize. Behavioural economists emphasise that humans beings are not computers, and most humans can use a little help. Sometimes people lack information. Sometimes people’s emotions get the better of them. Good nudges can give people the help they need.

The present world is seeing new ways to address serious social problems, ranging from public health to sex equality to tax compliance. Here nudges, which are relatively modest interventions that preserve freedom of choice but that steer people in particular directions, are seen to be increasing in importance. When the government provides people with health-related information, it nudges. A warning is a nudge. A reminder is a nudge. So is an emphasis on longstanding or emerging social norms.

Behavioural Insights Teams, sometimes called Nudge Units, can now be found in many nations. Every day, their work is saving lives, reducing poverty, improving public health, reducing sex discrimination, and helping to clean up the environment.

The appeal of nudge units lies in the fact that these interventions are cost-effective and do not require additional resources, but instead draw their power from a fundamental paradigm shift in the way policymakers view human behaviour. In India, where state intervention is vital, and the resource-starved state machinery faces numerous challenges in addressing the needs of the population, nudge units could help optimize the impact of public policies if used effectively.

The economic survey rightly emphasises that nudging and uses of behavioural economics are already playing a prominent and constructive role in India. For example, the Swachh Bharat Mission (SBM) has emphasised behaviour change in addition to the construction of toilets. It has succeeded in part because it has provided information, made the use of toilets more attractive, appealed to people’s emotions, emphasised new social norms, publicly celebrated Swachhata champions, and prominently connected the reform project to some of Gandhi’s teachings about cleanliness.

Another example is the Beti Bachao, Beti Padhao initiative, designed to address the decline in the child sex ratio and promote the empowerment of girls and women. A central goal has been to promote a social norm in favour of celebrating girls, rather than viewing them as a burden.

For India, one of the most important areas for the use of behavioural economics involves public health, which could greatly benefit from a sustained focus on potential nudges. A great deal could be done to promote flu shot appointments and other vaccinations.

Furthermore, the economic survey stressed the importance of understanding the social and cultural norms governing India. In a diverse country like India, an agile and adaptable network of nudge units across ministries and levels of government would be better placed to suggest nudges than a centralized body.

An underlying assumption in nudge theory is that the citizen does not understand what is best for them and hence the government has the power to restrict individual freedoms to serve the greater common good.Public support can be mobilized for proposed changes through public consultation. This can prevent the implementation of nudge theory seeming like coercive state action. 

Nudge units place great importance in the power of out-thinking the irrationality presented by everyday human behaviours. However, it would be dangerous to assume that all negative actions can be accounted for and reduced by the power of a nudge; nudge theory can never be a panacea for everything that is wrong with society. Moreover, it cannot be a replacement for shoddily-designed public policies and can only be used to augment the impact of well thought out policies.

Good nudges if they come from a doctor or a government can counter our biases. One thing the government can do is to give everyone clarity on what they should be eating if they want to avoid certain health risks. And if people want to eat differently from the nudge, they are free to do that. But the clear information overcomes the biases that lead them unwittingly to eat in an unhealthy way.

Conclusion

Behavioural economics is, however, not a panacea to policy making; its potential needs to be understood and put in perspective. Nudge policies cannot and should not supplant every incentive-based and mandate-based policy. However, the majority of public policy issues are amenable to incorporating nudges. Through a combination of an understanding of the Indian people and human behaviour, nudge units could be a potent enabler of change.