Brief book review – Nudge: The Final Edition

Richard Thaler and Cass Sunstein, 2021, Yale University Press, 384 pages

There will be few regulators who have not heard of the groundbreaking book Nudge: Improving Decisions About Health, Wealth and Happiness, published in 2008 by Professors Richard Thaler (University of Chicago) and Cass Sunstein (Harvard University). The authors have joined forces once more in the updated (and as they promise) final version of their work: Nudge: The Final Edition.

With the new book, they seek to achieve several things:

• Partially, it repeats the basics of nudging (the use of insights from the behavioural sciences in public policy, including regulatory governance).
• Partially, it seeks to better explain what Thaler and Sunstein mean with the term libertarian paternalism (which they roughly define as ‘nudging for good’ and ‘make it easy’).
• Partially, it reflects on how governments around the world have been using insights from the behavioural sciences in public policy since the original 2008 publication, just when the global financial crisis kicked in.
• Partially, it explores how governments can nudge (or perhaps, can nudge better) in areas such as personal finance, organ donation (they aim to set the record straight about the opt-in/opt-out discussion caused by the original book), and climate change.
• Partially, it introduces some novel thinking on the abuse or misuse of nudging, and the (unintentional or not) use of sludge: “any aspect of choice architecture consisting of friction that makes it harder for people to obtain an outcome that will make them better off (by their own lights)” (p.153).

In short, the book covers a lot of ground and depending on what you are after it may cover too much (some of it in too much detail, and some of it in too little detail). What I particularly appreciate is that the book touches on what appear to have become the most polemicised issues since the original Nudge was published in 2008. These include debates about whether governments can legitimately use “our biases” to “steer our behaviour”, and the risks of nudging with malicious intentions (by governments and others).

Considering that first issue, in The Final Edition, Thaler and Sunstein make it even clearer than in the original Nudge that, effectively, every form of public policy (including regulation) affects people’s choices. If you are involved in the business of affecting people’s choices (‘choice architecture’) then you might do better if you understand how and why people make the choices they make. Nudging itself is not married to a political philosophy; it is a science-based approach to public policy. Pure and simple. How nudging is used could be a political choice (and Thaler and Sunstein prefer libertarian paternalism).

Considering the second issue, yes, often we see that the principles of nudging are used against us. Think of the typical difficulty of unsubscribing from a contract that only took one click to set up initially—an archetypical example of ‘sludge’. Yet, regulators may also unintentionally use the principles of nudging against those they govern. Unintuitive regulation (because the language used clashes with our in-built biases and heuristics) or sticky compliance processes (because too many forms require the same personal data repeatedly) are but two examples of the sort of ‘sludge’ that regulators may wish to tackle.

All in all, Nudge: The Final Edition is a timely contribution to the ever-growing literature on the use of behavioural sciences in regulatory governance (and public policy more broadly). Whether you are new to the topic or a Nudge-veteran, the book is worth your time.

Disclaimer

In these brief book reviews, I discuss classic and contemporary books that make up the canon of regulatory scholarship. I focus on their central guiding idea or core notions and aim to keep the reviews to around 500 words. Unfortunately, this implies I must sacrifice a considerable amount of detail from the books reviewed.