FLAME University


The latest happenings in the FLAME Community

For the past few years, the world of policy making has been abuzz with talks on the many benefits of Nudge Theory. The theory gained massive traction in several countries after the Nobel win of the economist Richard Thaler in 2017. Like the other Nobel winner Daniel Kahneman, Thaler’s work incorporated insights from psychology to understand the good as well as the bad decisions made by individuals in a variety of scenarios.

In his popular book entitled Nudge: Improving decisions about health, wealth and happiness, he and coauthor Cass Sunstein define the concept of nudge as any aspect of choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.
To count as a mere nudge, the intervention must be easy and cheap to avoid. Drawing upon several social science studies, the authors state that most individuals make pretty bad decisions, decisions they would not have made if they had paid full attention and possessed complete information, unlimited cognitive abilities, and complete self-control. It is in this context that policy making can use nudges to guide people in the right direction. The concept is couched within the broader idea of libertarian paternalism which proposes to make it easy for people to go their own way, while simultaneously influencing their behavior in order to make their lives longer, healthier, and better. The concept has been successfully applied in a wide variety of situations resulting in people quitting smoking, eating more vegetables and fruits, using separate bins for general waste and recyclable material, donating organs, and paying taxes on time.

In 2010, Britain set up the ‘The Behavioral Insights’ team, also known unofficially as the ‘Nudge Unit’ to apply the theory to improve government policy and services as well as to save the UK Government money. India has not been far behind with the central government’s policy think-tank Niti Aayog, planning to start a nudge unit this year. In this year’s economic survey, chief economic advisor K V Subramanian dedicated an entire chapter on behavioral economics where he elaborated on the benefits of Nudge Theory in policymaking. He also pointed out the effective use of the theory in Swatch Bharat Abhiyaan (SWA) and Beti Bachao, Beti Padhao, two recent flagship schemes of the present government.

Several journalists have now documented the role of Nudge Theory in the partial success of Swatch Bharat Abhiyaan in the country. Multiple studies done over the past few years by social scientists have emphasized that the biggest challenge in sanitation in the country is to address people’s reluctance or refusal to use toilets. The SWA made extensive use of electronic media to drive home the message about the important health benefits of using toilets. Crucially, advertisements focused on urging families to uphold the honor of their women by building and using toilets—toilets were even renamed as ‘izzat ghar’ (house of dignity) in Hindi-speaking states. While we cannot deny the regressive tone of this message, we also have to note that it was effective, mainly because it incorporated a local idiom around gender.

This is perhaps the right time to utilize the growing popularity of Nudge Theory in addressing some of the other pressing problems in India. An urgent problem that should worry anyone who cares about gender equality is the falling female Labor Force Participation Rate (LFPR) in the country. One report states that India’s female LFPR—the share of working-age women who report either being employed, or being available for work—has fallen to a historic low of 23.3 percent in 2017-18. Another report notes that female LFPR has had a decadal fall from 36.7 percent in 2005 to 26 percent in 2018, with 95% women (195 million) employed in the unorganized sector. While some of the fall can be explained by an increase in the number of girls in higher education, the data is also indicative of a fall in working rates for older women.

Academic work from across the globe has shown that one of the key indicators of women’s empowerment is their participation in the workforce. A woman’s entry into the workforce undeniably increases her bargaining power within the household which not only has a positive effect on her health and nutrition but also on the health, nutrition, and education of her children. Scholars working on India have pointed towards conservative social norms as one of the reasons for the falling LFPR across the country. Insights from Nudge Theory would be immensely useful in addressing some pertinent questions in this area: How can nudge policies be used to identify specific barriers to women’s work and mobility in urban and rural areas? In what ways can policies and programs address the resistance put up by members of a woman’s family and community? What are the best possible ways to convince men—especially fathers and husbands—about the importance of women’s employment? In what ways can young women be persuaded to take up careers in the male-dominated STEM fields? Serious thinking around these questions with the help of Nudge Theory can possibly result in effective policies and programs resulting in sustainable change. 

Juhi Sidharth
Assistant Professor of Public Policy