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Policies Need a Cautious Nudge
Recent developments suggest that policymakers in India are gearing up for the application of nudge theory in policymaking. However, there is a need for a scrutiny of the normative foundations and the social ethics underlying the nudge agenda for policymaking. Policymakers need to take these into cognisance while thinking about its application.
The author would like to thank readers for comments on an earlier version of this article that was published in two blogs for the Centre for Policy Studies, IIT Bombay.
In a recent interview, one of the chief advocates of the use of nudge theory in policymaking, Cass R Sunstein of Harvard University, expressed his optimism about India becoming a world leader in the use of nudge (Padmanabhan 2019). A few months back, the Economic Survey (2019: 29) in the abstract of its second chapter of volume I, titled “Policy for Homo Sapiens, Not Homo Economicus: Leveraging the Behavioural Economics of ‘Nudge’,” noted that: “Drawing on the psychology of human behaviour, behavioural economics provides insights to ‘nudge’ people towards desirable behaviour.” Following the aspirations to leverage behavioural insights for “path-breaking change” as formulated in the Economic Survey (2019), NITI Aayog promptly advertised the setting up of a “Nudge Unit.”1 In what follows, I briefly explain the rise in popularity of behavioural economics and nudge in policymaking, and argue why in an attempt
to nudge citizens to change their behaviour, there is more need for caution than exuberance.
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