Towards a New Political Economy of Behavioral Public Policy

• Published date: 01 November 2019
• Date: 01 November 2019
• Author: Adam Oliver
• DOI: http://doi.org/10.1111/puar.13093

Public Administration Review,

Vol. 79, Iss. 6, pp. 917–924. © 2019 The

Authors. Public Administration Review

published by Wiley Periodicals, Inc. on behalf of

The American Society for Public Administration.

DOI: 10.1111/puar.13093.

917

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited

and is not used for commercial purposes.

Adam Oliver

London School of Economics and Political Science

Towards a New Political Economy of Behavioral Public Policy

Abstract: The dominant normative framework in behavioral public policy postulates paternalistic intervention

to increase individual utility, epitomized by the so-called nudge approach. In this article, an alternative political

economy of behavioral public policy is proposed that sits within, or at least closely aside, the liberal economic tradition.

In short, rather than impose utility maximization as the normative ideal, this framework proposes that policy makers

provide an environment that is conducive to each person’s own conception of a flourishing life, while at the same time

regulating against behaviorally informed harms and for behaviorally induced, otherwise forgone, benefits.

Behavioral public policy is the application of

insights from behavioral economics specifically

and behavioral science more broadly to

public policy design. It is, in any substantive sense, a

relatively recent endeavor, although several decades

of social science scholarship underpin the approach

(for recent accounts of the development of the field,

see Oliver 2017; Thaler 2015). Several conceptual

behavioral public policy frameworks now exist. Some

of these approaches aim to educate—to “boost”—

people about their possible behavioral biases so that

they may make more savvy decisions (Gigerenzer

2015; Hertwig 2017), and others call for people to

engage in more deliberative decision-making—to

think more for themselves—so as to minimize

reflexive errors (John et al. 2011). Some frameworks

instead aim to influence automatic decision-making

without appealing directly to deliberation while also

retaining the notion of liberty (Thaler and Sunstein

2003), whereas still others allow heavy doses of

regulation and even bans (Conly 2013). Some focus

on improving the well-being of those that the policy

interventions target specifically, whereas others look

toward reducing harms to, and increasing benefits for,

others (Oliver 2015).

The dominant framework in behavioral public

policy to date, however, focuses paternalistically on

internalities—that is, it aims to change the behaviors

of those targeted for their own benefit—and where

the normative goal is to improve welfare, utility, or

happiness, an approach epitomized by libertarian

paternalism, applications of which are known as

“nudges” (Thaler and Sunstein 2003, 2008). In this

article, I challenge whether, in relation to influencing

the behavior of responsible adults, this ought to

be the principal normative approach—that is, the

political economic framework—that shapes the

future of the field. Rather, I argue for a behavioral

public policy framework that sits within the liberal

economic tradition of, for example, John Stuart Mill

([1859] 1972), although compared with others in this

tradition, the approach posited here aims to tackle

more forcefully behaviorally informed harms.

The Paternalistic Embrace

As intimated earlier, libertarian paternalism has

been by far the most prominent framework in the

behavioral public policy discourse. Like its close

cousin asymmetric paternalism (Camerer et al. 2003),

libertarian paternalism is an approach that seeks

to guide people’s behavior in particular directions

without the use of force or mandates. People are free

to continue with their existing behaviors if they wish;

Richard Thaler and Cass Sunstein (2008) contend

that retaining freedom of choice is the best safeguard

against any misguided policy interventions.

Behavioral economists have observed that many

people are guided by particular behavioral influences

that appear almost innate, including, for instance,

loss aversion (i.e., the heavier weight that people

attach to losses than to gains of the same magnitude)

and present bias (i.e., the heavy emphasis that

people place on the immediate moment) (for a

review, see Camerer and Loewenstein 2003). These

influences conflict with the assumptions of standard

neoclassical economic theory and rational choice

theory. Underpinning libertarian paternalism is the

assumption that of the many quick and automatic

decisions that people make each day—decisions that

are invariably guided by these behavioral influences—

Adam Oliver is a behavioral economist

at the London School of Economics

and Political Science. He has published

and taught widely in the areas of

health economics and policy, behavioral

economics, and behavioral public policy.

He is a founding editor in chief of the

journal

Behavioural Public Policy

. He is the

editor of a volume also titled

Behavioural

Public Policy

(Cambridge University Press,

2013) and the author of

The Origins of

Behavioural Public Policy

(Cambridge

University Press, 2017) and

Reciprocity

and the Art of Behavioural Public Policy

(Cambridge University Press, 2019).

E-mail: a.j.oliver@lse.ac.uk

Stephen E. Condrey

and Tonya Neaves,

Associate Editors

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