To conclude this review of the literature on the use of behavioural insights in regulation, I will zoom in on ethical and epistemic challenges. In other words, is it proper for governments to use people’s heuristics and biases (or ‘cognitive failures’ as some call it) in guiding their behaviour? How can governments be sure that people do not act in their own best interest? Why would the government (and its representatives) not be subject to the same biases and heuristics as those they seek to address in others?
To some, these are trivial questions. After all, if a democratically elected government decides to use insights from the behavioural sciences in regulation, how is that different from it using insights from the natural sciences in regulation? To others, they are fundamental questions indeed. They fear that allowing governments to use behavioural insights in regulation will result in behavioural manipulation and covert techniques to influence decisions and shape preferences.
Without delving too deep into all the answers that scholars have provided, it seems relevant to me to touch on a few of the most recurring ones.
The ethics of applying behavioural insights in regulation
Academics are actively discussing the ethical aspects of this approach to regulation. Those in support argue, among others, that our brains have not been able to evolve as quickly as society has, and that as a result our brains are not ‘programmed’ to deal optimally with the choices we face on a day to day basis. Because we know why people make choices that are not in their own best interests, governments are obliged to help them doing so. They further argue that businesses have been using behavioural insights for marketing and sales purposes, and question why governments should not be allowed to do the same. Finally, they argue that people around the world have voiced support for the use of behavioural insights in regulation, legitimising governments’ use of it. Cass Sunstein’s most recent book, Human agency and behavioural economics: Nudging fast and slow, is a typical example of this set of responses.
Those opposing the use of behavioural insights in government regulation often do so from a libertarian point of view. They consider that the proper role for government is to prevent people from harming each other, but otherwise, it should leave people alone. From this perspective, addressing people’s heuristics and biases through regulation limits their individual freedom, which in the eyes of this group is a no-go. The use of behavioural insights by businesses, they argue, is a different matter altogether as it happens in a competitive market setting and if people would experience the adverse outcomes of ‘nudges’ from one business they could go to another. They further argue that these ‘soft regulatory’ interventions open the door for the government to intervene in more aspects of society and expand its power. A recent book by a group of mainly USA-based scholars, Nudge in Theory and Action: Behavioral Design in Policy and Markets, is a typical example of this set of responses.
Between these extreme responses, more moderate ones have been suggested also. Interventions that enhance reflective decision making or seek to bias a decision towards the desired direction are not problematic, some scholars argue. These include the provision of factual information, active choosing, or a change in default rules. Yet, interventions that are covert, manipulative, or shape preferences are problematic, these scholars warn. For example, an anti-obesity campaign that uses slim, young, and attractive models to show their ‘healthy’ waistlines. Even more practical are the rules of thumb suggested by these moderate scholars. Can people uncover the ‘nudge’ or are they aware of being ‘nudged’? Is government seeking to help people achieving their goals (‘means paternalism’) rather than shaping their goals (‘ends paternalism’)? Does the intervention preserve freedom of choice and does it not pose material costs on peoples’ choices? If the answer to these questions is a firm yes, then most moderate regulatory scholars will agree that using behavioural insights in regulation is justified.
The epistemic challenges of applying behavioural insights in regulation
The ethical problems that people express to the use of behavioural insights in regulation largely reflects their political philosophy. Those leaning to libertarianism generally oppose this approach to regulation, those leaning to (moderate forms of paternalism) typically favour it. Yet, a comment seems to be in place here. The book Nudge has a solid political undertone (a call for ‘libertarian paternalism’), which partly explains the strong pro and con debates on this approach to regulation. Yet, the use of insights from the behavioural sciences in regulation can be looked at from apolitical neutral point of view. The question ‘whether it helps to achieve desirable regulatory outcomes’ can, after all, be answered separately from answering the question ‘ought it be applied’.
Taking the political philosophy of the book Nudge out of the equation does, however, not take away all critique to this approach to regulation. Questions have been raised as to whether people are genuinely making cognitive errors. What about someone who understands the risks of smoking or texting-while-driving, consciously chooses these activities because they give her or him pleasure (utility), and fully accepts the consequences of doing so? Is this person acting irrationally? Scholars stress that rationality and irrationality are social constructs and qualifiers for behaviour. They are not facts, cannot be objectively proven right or wrong, and they have no distinct structural foundation in the brain., What is considered rational today, may not be so in the future. What is rational in New Zealand, may not be rational elsewhere. And what is rational for me, may not be rational for you. Still, books like Nudge assume there is objective rationality that is external to people. In a related vein, scholars have asked whether governments are perhaps influenced by the same heuristics and biases they seek to address in others. They may, for example, be biased in their support for or opposition to the use of behavioural insights in regulation. Trying to solve this exact issue, in 2018, the UK based Behavioural Insights Team has published a report on how government officials are indeed also subject to heuristics and biases,and how these can be addressed or mitigated. The lessons presented in this report are not only valuable to those interested in exploring the use of behavioural insights in regulation, but to virtually any form of regulatory intervention. The report is certainly something I would suggest policymakers and regulatory decision makers consult when developing and implementing novel regulatory interventions.
 Sunstein, C. (2017). Human agency and behavioural economics: Nudging fast and slow. Cham: Palgrave Macmillan.
 Abdukadirov, S. (Ed.) (2016). Nudge in Theory and Action: Behavioral Design in Policy and Markets. Cham: Springer.
 A typical example is Baldwin, R. (2014). From Regulation to Behaviour Change: Giving Nudge the Third Degree. Modern Law Review, 77(6), 831-857.
 For a social-science discussion, see McMahon, J. (2015). Behavioral economics as neoliberalism: Producing and governing homo economicus. Contemporary Political Theory, 14(2), 137-158.
 For a neuro-economics discussion, see Bissonnette, J. F. (2016). From the moral to the neural: brain scans, decision-making, and the problematization of economic (ir)rationality. Journal of Cultural Economy, 9(4), 364-381.