Libertarian Paternalism: Nudging Towards Better Choices in Governance

1. LibertarianPaternalism as a newgovernmentconcept Jakub Pavelek; supervisor Martin Macháček VŠB TU - Ostrava

2. Summary • Definition • Examples • LibertarianPaternalism in the EU • Aimofthe PhD thesis

3. Definition • Part ofbehaviouraleconomics • Goalis to set up systemwhichwill benefit certainbehaviour • „Nudge“ • Term wasintroduced by Richard Thaler and CassSunstein • Researchis done by practicalexamples and experiments

4. Critique • Nudges are disrespectful. They treat people like children. • Nudges tent to perpetuate and to amplify deliberative flaws. • Nudges undermine autonomy. • Nudging is condescending and arrogant. • Even if the goal is noble, the means are still by influencing people’s behaviour • Hidden influence is even worse than admitted

5. 4 Types of nudges • Mindful nudges guide people to a more controlled state such as eating healthier, stop smoking, exercising and saving more money • Mindless Nudges use emotion or framing to sway decisions that people make • Encouragiung nudges facilitate the implementation or continuation of particular behaviour • Discouraging nudges hinder or prevent behaviour that is believed to be undesirable

6. Examples in theworld • Opt-outsystemof organ donoring • Managingof pension funds • New York cabbies • Regularcheckupsatdoctor • Restaurant toilets

7. Opt-outsystemof organ donoring • Differencesbetween Germany and Austria • In Austriathereis 99,98 % rateof organ donors • In Germanythisnumberisclose to 12 % • Differenceiscaused by different default approaches by these twostates

8. Managing of pension funds • In UK, there was low pension saving rates before 2012 • In 2012 government made employers establish an automatic enrolment • Workers would be automatically placed into pension program lead by that firm unless they request to be exempted • Employees didn’t have to make difficultdecisions anymore • Membership in private pension schemeshas risen from 2.7 mil. To 7.7 mil. In 2016

9. New York cabbies tip • Solution to lowtipping in NY cabs • Taxi driversprotestedagainstcardpayments • Three default optionsof tip payment • Tip increasedfrom 10% to 18-22%

10. Regularcheck-upsatthedoctor • In Czech Republic, governmentwanted to introducenewincentive in health management • Czech public health has problemswithpeople not going to regularcheck-upswiththeirdoctor • New systemwouldfavorpeoplewhich do so by loweringhealthinsurancepaymentsforthem • Thiswouldlower country’s budget income but on the other hand would significantly lower expenditure on health

11. Urinals in restaurant toilets • Solution for mess on public toilets • Men will subconsciously “target” the fly • This simple solution has lead to induce less mess on toilets inducing lower cleaning costs

12. Nudge in the EU • Public hearing Towards applying nudge thinking to EU policies • The European Nudge Network (tenudge.eu) • Nudge-it project (nudge-it.eu) • Lot of European Commission’s research isaimed towards libertarian paternalism and itsapplication

13. The European Nudging Network • Managed by The Center for Science Society and Policy in cooperation with OECD • Launched in June 2014 • Goal is to organise conferences, database nudges and collect results of using these measures

14. Nudge-it project • Made by University of Edinburgh and closely cooperating with EU • This project focuses on improve public health by focusing on healthier lifestyle – mainly food • They are partnering mainly with universities and research centers to provide better solutions for public health

15. Aim of the PhD thesis • The PhD thesis will be aimed to conducting an experiment to prove positive effect of nudging • Since as a university student I don’t have option to make laws, we have to make a different experiment • Goal will be to change rules of completion of a university course • Designing the experiment is very difficult • Hopefully this experiment will demonstrate effects of nudging on university students

16. Thank you for your attention