How the Conservatives will "embed behavioural thinking throughout government"

Shadow chancellor George Osborne has co-authored a piece in today's Guardian with Richard Thaler, the American economist and promoter of 'Nudge' theory.

They write:

"If we recognise that people do not always act rationally, what does this mean for public policy? This is where behavioural economics and social psychology... comes in. These disciplines are enabling us to develop a new approach to policymaking, based on empirical evidence about how people really behave

"Evidence from behavioural economics and social psychology can't only help us meet our goals more effectively, it can also help us to achieve them more cheaply, and without intrusive and burdensome regulations. This is therefore a fundamentally conservative approach, which can help us to reduce government spending and get the deficit down, while at the same time building a more responsible society where people are in control."

They go on to give examples of how the theory translates into policy:

"Because the academic literature shows the importance of a way a decision is framed, the Conservative party is working with councils to replace Labour's bin taxes with schemes that pay the public to recycle. In Windsor and Maidenhead our pilot scheme has already increased recycling rates by 30%. And because the behavioural sciences show that people often make bad decisions when they're excited by the prospect of immediate gratification, a Conservative government will impose a seven-day cooling off period for store credit cards, so shoppers can't immediately rack up debts on them when they sign up at the till. That's a far less intrusive way to tackle problem debt than banning store cards, for example, or introducing a new tax."

Click here to read the whole piece.

Jonathan Isaby