Why Nudge Policies Failed
The life of a globe-trotting environmentalist is a breeding ground for moral quandaries. My oldest friend happens to be one such climate advocate; for several years, he ran a nonprofit encouraging carbon capture in the European Union. When it comes time to attend a lecture or a summit abroad, he avoids flying if he can. If not, he flies economy—the least carbon-intensive option—and swats aside a vague feeling that he is “getting away with something.” Even though his work could help save the planet, he is forever calculating each mote of carbon that enters the atmosphere as a result of his personal choices: what to eat, where to travel, what to keep or throw away. He feels, in a word, responsible.
This is no accident. For decades, industries hoping to avoid regulation have reminded us about our personal culpability for social problems. Think of the famous 1971 “Crying Indian” ad, in which a Native American man sheds a tear over a piece of litter—a PSA that was sponsored by packaging companies. Or the concept of a personal carbon footprint, which was popularized in the early 2000s by one of the world’s largest oil companies, BP. A few years after that, behavioral economists began repurposing these tactics for benevolent purposes, using subtle psychological cues called “nudges” to encourage people to file their taxes, save for retirement, exercise, and vote. Over the next decade and a half, political leaders enthusiastically embraced the idea, adopting behavioral-science solutions to far-reaching public-policy problems.
Let’s say you’d like to encourage everyone to recycle as diligently as my friend does. Instead of instituting an onerous, possibly unpopular mandate, you could nudge. You could, as officials did in the United Kingdom, put up posters of watching eyes to promote good behavior. Or you could copy the authorities in Copenhagen and paint the sidewalk with footprints leading to trash bins. The problem that emerged with this approach, which is neatly summarized by George Loewenstein and Nick Chater in their new book, It’s on You, is that, in retrospect, a focus on personal responsibility in this situation was “misplaced.” “The prevalence of plastics, and plastic waste, has not been caused by individual careless consumers,” they write. “It has been caused by the relentless growth of the plastics industry.”
When nudges like these work, the benefits are minor. Meanwhile, and much worse, they shift focus away from truly effective changes—in this case, a limit on the production of single-use plastics—by convincing individuals that they are at fault. In the long term, this failure to address deep social problems contributes to the erosion of people’s trust in governments and institutions, breeding nihilism and an attraction to demagogues who claim to have easy answers.
[Read: How useful is recycling, really?]
Loewenstein is widely credited with co-founding the field of behavioral economics, and both he and Chater, a U.K.-based behavioral scientist and consultant, contributed to nudge-policy making and research. This book is in part their mea culpa. It’s also a convincing argument that grounding the collective good in personal choices can be corrosive, especially in a deeply individualistic culture. Like my friend the environmentalist, many of us are left to wonder: How can we function in a society that betrays our natural concern for the world around us?
Like most would-be revolutions, the nudge was launched with a manifesto. “Better governance often requires less in the way of government coercion and more in the way of freedom to choose,” the law professor Cass R. Sunstein and the economist Richard H. Thaler wrote in their 2008 best seller, Nudge: Improving Decisions About Health, Wealth, and Happiness. The book sold more than 2 million copies and became a sensation in policy circles. President Barack Obama and British Prime Minister David Cameron created dedicated teams often referred to as “nudge units” within their administrations. Sunstein joined the federal government as Obama’s regulatory czar. The appeal to politicians was obvious: They could engineer a better society without having to build consensus for more taxes, regulations, bans, and mandates. Sunstein and Thaler called this approach “libertarian paternalism,” which promised to resolve a central conflict in civics by, in effect, sidestepping it.
Loewenstein and Chater met on the U.K.’s nudge unit in 2013. “It is hard now to recapture the sense of possibility that was in the air as the new behavioral approach to solving society’s, and the world’s, problems began to gain ground,” they write. In the years that followed, their enthusiasm faded to skepticism as some of the most touted nudges proved less effective, or less durable, than advertised.
One such nudge is to “default” people into responsible choices, which exploits their natural bias for the status quo. A 2024 paper co-authored by the economist David Laibson tracked several American companies that auto-enrolled employees into sensible retirement plans with a standard minimum contribution. This worked—for a time. Because sticking with the plan was optional, many workers withdrew their money early, which mostly erased any long-term gains. Laibson and his collaborators found that workers saved less than 1 percent more of their income. By contrast, Australia signs up all earners for a retirement plan at a 12 percent contribution and doesn’t let them withdraw funds before age 55. The country’s retirement savings are more than 150 percent of GDP, one of the highest rates in the world.
Examples of inadequate nudges abound. In the fight against obesity, a well-known intervention is to pay people for losing weight. This does show meaningful effects—as long as they’re being paid. When payment stops, they gain the weight back. As the authors note, a more lasting solution would be to place limits on fat and sugar in ultra-processed food, which makes up more than half of the average person’s calorie consumption.
Chater and Loewenstein refer to these competing policy approaches—the individual and the systemic—as the “i-frame” and the “s-frame.” When we focus on i-frame nudges, they argue, we drain momentum from more effective s-frame solutions. Take paying taxes, a monumentally complex and frustrating endeavor for the average person: The IRS could just calculate your return and send you a check or a bill, as other countries’ tax authorities do. But the tax lobby has consistently blocked this, promoting individual choice to protect the billions of dollars that it earns each year in tax-preparation fees. This kind of misdirection creates a “crowding out” effect: Experiments by Loewenstein and his colleagues have shown that, after people are nudged to conserve energy, they become less likely to support a more systemic solution such as a carbon tax.
Using human flaws to manipulate people into doing the wrong thing seems much easier than getting them to do the right one, especially when the negative forces are global corporations funding multibillion-dollar marketing campaigns, and the positive forces are enlightened bureaucrats sending small experimental signals. Chater and Loewenstein believe that the government nudgers are not malevolent, but misguided. But by participating in the past half century’s slide into hyper-individualism, libertarian paternalists are contributing to a collective ungluing. To understand the consequences of this “one weird trick” model of ordering a society, just look at the current state of America’s institutions, which are being torn down by a public convinced that nothing works.
The authors of It’s on You mention the present-day social and political consequences of nudge policies, including the hunger for reform that populists such as Donald Trump have seized on and sometimes betrayed—but they don’t really spell them out. The book ends with a series of prescriptions for “unrigging” the rules of democracy and the economy, many of which sound familiar: take money out of politics, close the revolving door between government and industry, hold Big Tech accountable for online abuses. Thaler, the Nudge co-author, objected in a 2023 paper that such “nanny state” initiatives are unrealistic. But if the spotty record of nudges has proved anything, it’s that half measures won’t solve our deepest problems. “The history of democratic politics across the world is, after all, one of continual and often convulsive struggle to wrest control of the political and legal processes from the few to the many,” Chater and Loewenstein write.
But what if the problem is not only structural but also cultural? I suspect that the authors would largely agree that nudges didn’t make American society pathologically individualistic and atomized; instead, nudging was a well-meaning but inadequate attempt to circumvent a mindset that is already baked in. The depth of this predicament was apparent during the coronavirus pandemic, when social media abounded with declarations of resistance such as that of the retired baseball player Aubrey Huff, who stated that he “would rather die” than wear a mask. You might say that the United States has—as the behavioral economists might put it—its own cognitive bias. You could call it the cowboy effect.
At times, that bias has dragged us down; in other moments, it has helped us achieve a collective good. Large social changes built around appeals to personal freedom, such as the legalization of gay marriage, seemed impossible until a substantial proportion of the public showed visible support for them, and then they started happening all at once. Today’s progressive populists, including Bernie Sanders and Elizabeth Warren, have gained some limited traction in portraying the government as a protector of individual freedom against corporate power, much as President Franklin D. Roosevelt sold his New Deal policies as a shield against the “economic tyranny” of that era’s oligarchs.
Which brings me back to my friend the environmentalist. He knows all about the manipulative history of the nudge, including the packaging-company PSA and the carbon footprint, yet he still feels a personal obligation that goes beyond his work in the s-frame. With a lot of thought, he has learned to recontextualize the sense of responsibility. Now when he carefully chooses to stay home rather than fly, or when he eats veggies instead of pork, he imagines not a one-man fix to the climate crisis but a quiet demonstration of a new social norm, which one day might force politicians to act—if not through the recycling bin, then through the ballot box. After all, there is a way to harness the collective effort of individuals to bring about desperately needed change. It’s called a government.