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How 'nudge' happened: the political economy of nudging in the UK

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  • Mills, Stuart
  • Whittle, Richard

Abstract

The UK Behavioural Insights Team transformed nudging and behavioural economics from nascent ideas to key policy tools for the UK Coalition Government. This article argues that political economic circumstances significantly contributed to the success of this ‘nudge’ programme. The Global Financial Crisis (GFC) created a ‘contest of authority’ over dominant policy approaches. By framing the crisis as a crisis of rationality, behavioural perspectives gained political support. The GFC also saw that the UK Government (from 2010) adopt a programme of fiscal austerity. Nudging complemented this programme by suggesting effective policy could be made cheaply. Using various accounts of nudging in the UK from those involved in its development, we demonstrate the role of the country’s political economy in the behavioural turn. We conclude by reflecting on the role of behavioural insights today, given a political–economic landscape much changed since 2010.

Suggested Citation

  • Mills, Stuart & Whittle, Richard, 2024. "How 'nudge' happened: the political economy of nudging in the UK," LSE Research Online Documents on Economics 126042, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:126042
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    More about this item

    Keywords

    austerity; behavioural economics; nudge; political economy;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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