Nudging and Participation: a Contractualist Approach to Behavioural Policy

• Published in: Philosophy of management 2020-03, Vol.19 (1), p.45-68
• Main Author: Häußermann, Johann Jakob
• Format: Article
• Language: English
• Subjects: Behavioral economics; Business and Management; Education; International Political Economy; Philosophy; Public policy
• ISSN: 1740-3812; 2052-9597
• DOI: 10.1007/s40926-019-00117-w

As behavioural economics reveals, human decision-making deviates from neoclassical assumptions about human behaviour and people (often) fail to make the ‘right’ welfare-enhancing choice. The purpose of Sunstein and Thaler’s concept of ‘nudge’ is to improve individual welfare. To provide normative justification, they argue that the only relevant normative criterion is whether the individual is ‘better off as judged by themselves ’, so that the direction in which people are to be nudged is defined by their own preferences. In light of behavioural findings, however, people’s choices do not provide a sound basis for eliciting preferences and thus for assessing welfare. In this paper, I aim to challenge Sunstein and Thaler’s normative view, arguing that it is unreasonable to rely on conventional welfare economics, particularly considering the given context. Sunstein and Thaler depend on an approach of ‘preference purification’ which assumes informed, latent, and true preferences: As a result they face crucial methodological, epistemological, and practical objections, and cannot show how their approach enhances individual welfare. By building on the concepts of R. Sugden and C. Schubert, I develop an alternative normative framework for behavioural public policy, based on a contractualist perspective in which people may consent to collective choice rules in order to align future behaviour with values, to achieve particular goals or to preserve personal integrity. Individual consent and citizens’ participation and deliberation are crucial to this approach. This contractualist approach may provide a normative justification for behavioural public policy, and help to reconcile behavioural and normative economics.