Nudges Versus Pushes In The Obama Administration

Earlier in the year I saw the appointment of Cass Sunstein to head the Office of Information and Regulatory Affairs as a favorable move by Obama. The OMB Blog reports that this is now official:

One of the most important intellectual developments of the past several years that has had a huge impact on my own thinking has been the rise of behavioral economics. By taking the insights of psychology and observed human behavior into account, we now have a fuller picture of how people actually behave – instead of just reducing them to the hyper-rational utility-maximizers of Econ 101.

Cass Sunstein, while not an economist, has been at the forefront of this intellectual vanguard – most recently, with his acclaimed book Nudge, co-authored with Richard Thaler – and I am pleased to announce that the President today nominated Cass to be the Administrator of the Office of Information and Regulatory Affairs here at OMB.

In this role, Cass will be able to shape a regulatory structure that is rooted in commonsense to achieve the values and ends that the President and the American people seek. For years, Cass has been that rare specimen – an academic whose writing and thinking has had a real effect on policymakers. Indeed, Cass is the most cited law professor on any faculty in the United States. Now, Cass is entering the arena, and I am eager to work with him to implement the President’s regulatory reform agenda.

One’s view of this appointment provides a quick litmus test to distinguish old time Democrats from the more independent (and often more libertarian) voters who backed Obama over Clinton for the Democratic nomination. Robert Kuttner wants to see far more from the Obama government than the types of nudges Sunstein prefers. Ezra Klein sums this up with, “The question, for Kuttner, is whether Sunstein — and the administration — will prove so enamored of nudges that he’ll forget how to push.”

Yes, unfortunately, sometimes  a nudge is not enough and a push might be necessary. The question is whether one immediately turns to government to push others into doing what they believe they should or if they resort to such pushing reluctantly as a last resort. While the concept of a Team of Rivals might have been exaggerated by the media, this is a fundamental issue where different views will be considered by different members of the Obama administration.

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3 Comments

  1. 1
    Eclectic Radical says:

    Pushes are sometimes better than nudges, but nudges are better than sitting on one’s hands and waiting for things to fix themselves. While preferring more radical action myself, I am pragmatic enough to understand that gradualism allows for increased effort should initial investment be too small.

  2. 2
    Ron Chusid says:

    The question of nudges versus pushes is based upon libertarian grounds rather than efficacy. Pushes may or may not be more effective, but it is preferable to leave people with as much individual choice as possible.

  3. 3
    Eclectic Radical says:

    I would agree with that, so long as the choice is genuine. The problem with many conservative and libertarian ideas of ‘choice’ these days is that they are choices for those who can afford them and fiat for everyone else. 😉

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