Behavioural insights, also known as behavioural economics or behavioural science, is an interdisciplinary field that combines insights from psychology, economics and other social sciences to understand and influence human behaviour. It examines how individuals make decisions, looking at the cognitive biases, social influences and contextual factors that shape behaviour.
Two individuals who have significantly contributed to its popularity are Richard Thaler and Cass Sunstein. Thaler, an economist, and Sunstein, a legal scholar, co-authored the influential book Nudge: Improving Decisions About Health, Wealth, and Happiness. This book introduced the concept of ‘nudging’, which involves designing choice architectures to steer individuals towards better decisions but without restricting their options.
Behavioural Insights team
The ideas presented in Thaler and Sunstein’s book had a profound impact on public policy and have led to the establishment of behavioural insights teams in governments around the world. The UK’s Behavioural Insights team (BIT) is commonly referred to as the Nudge Unit.
BIT was set up in 2010, under the administration of then-prime minister David Cameron. Its function was to use behavioural insights to inform and improve public policy and service delivery. The unit collaborated with other departments to design interventions that nudge citizens towards making desirable choices in areas such as health, finance, energy conservation and tax compliance.
BIT became a limited company in 2014, and is now a partly government-owned, partly employee-owned company structure. This allows BIT to operate more independently while still collaborating with government departments and agencies. Several government organisations now have teams of ‘nudgers’, including the Department of Health and Social Care, the Department for Education, the DWP, HMRC and the NHS.
Nudge and sludge
Nudge is probably the most well-known concept of behavioural economics.
It involves subtly directing the presentation of choices to encourage positive behaviour without actually restricting the available options. Nudges might be the texts you get from your dentist, reminding you to come for your check up next week. Or the “See it. Say it. Sorted” messages you hear on a train. These simple measures encourage useful behaviour but without imposing penalties or restricting your freedom to simply ignore the message.
Nudge’s evil twin is sludge.
In contrast to nudge, sludge involves creating barriers and complexities that make it more difficult for people to take certain actions. How easy is it to talk to customer service these days? It isn’t, is it? Help line delays, lengthy and complicated procedures for contacting companies, the near-impossibility of actually speaking to a human being – all these barriers deter people from accessing customer support services that could represent a significant expense to a company in terms of staff time and wages.
Fear and propaganda
The use of fear and of propaganda are also well-known techniques.
Emails from companies might highlight the potential consequences of non-compliance or non-payment, such as penalties, fines or legal action. While the intent is to inform people about their obligations, the deliberate evocation of fear in these messages can result in anxiety, stress or even mental illness.
Propaganda is the use of information, persuasion or manipulation to promote a particular agenda. Misleading or biased information is disseminated to influence public opinion on a political issue, in order to serve the interests of a specific group. HMRC, an adept user of behavioural insights, used a campaign of disinformation to mitigate its failure to take action against promoters of Disguised Remuneration schemes.
Positive and negative impact
Behavioural insights techniques are neither inherently good nor inherently bad. It depends upon who uses them and how they do so. If applied ethically and responsibly, they can have a positive effect on people. They can guide people towards healthier behaviours such as regular exercise and healthy eating. Nudges and interventions that make these behaviours more accessible, convenient and socially normative can help people make positive changes to their lifestyle.
In a similar way, messaging that encourages help-seeking behaviour or provides accurate information about physical or mental health conditions can help break down stubborn barriers to seeking support. I don’t know if King Charles is a proponent of behavioural economics but his decision earlier this year to go public about his prostate treatment is likely to have nudged men of a similar age – a notoriously hard group to reach – to get themselves checked too.
On the other hand, behavioural insights techniques may also have a negative impact on people. If the techniques are used inappropriately or unethically, they can manipulate individuals’ perceptions and behaviour without their consent or awareness. Interventions that target specific behaviours or groups of individuals, for example, may reinforce stereotypes or stigmatise certain populations. Some behavioural interventions involve the collection and analysis of personal data, raising privacy concerns among individuals.
I have already mentioned HMRC and the way it has overseen the Loan Charge policy. The department’s use of behavioural insights was highlighted in a 2020 Loan Charge All-Party Parliamentary Group Report. The report concluded that at least 30 behavioural insights had been used in communications from HMRC to people which amounted to clear misconduct and bullying. HMRC communications were directly cited in one of the cases of suicide of people affected by the Loan Charge.
All change?
The use of behavioural insights techniques is currently widespread throughout government. However, the approaching general election may represent a turning point. If there is a change of government, will there also be a change in the government’s enthusiasm for nudge and sludge, for fear and propaganda?
Only time will tell.
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