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28/11/2014

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Taxation works better than nudging

By Wendy Barnaby
 
Government regulation and taxation will be needed to make populations eat the right food, drink moderately, take enough exercise, save for pensions and reduce their environmental footprint, Lord Krebs in his Presidential address has told the British Science Festival.
 
It is fashionable for governments use insights from behavioural sciences to “nudge” their populations into doing what is right for them and society as a whole, or to use techniques of persuasion to the same end.  These insights are important in changing behaviour, and for some policies they can make a significant difference, said Krebs.  But the government will need the more traditional tools at its disposal if it is serious about tackling the big issues.
 
“Tough policies need tough actions,” said Lord Krebs.
 
“Insights from behavioural science are not the get-out-of-jail-free card for governments unwilling to be labelled as nanny states,” he said.
 
His comments come against the background of the world population aspiring to consume at the same rate as the average US citizen. If this were to happen, “the environmental impact, measured as greenhouse gas emissions, would equate to a global population of over 70 billion people, roughly ten times what it is now,” said Krebs.
 
“You would have to be more than an optimist to believe that the Earth could sustain this level of environmental pressure, or that technology on its own will find a way of solving the problem of allowing everyone to consume at the American level without disastrous consequences for the environment.”
 
Anti-smoking campaigns have been successful in the UK, as have the big decrease in drink-driving, and driving without seatbelts.  But governments which are serious about introducing sustainable forms of transport spend much more money than the UK currently does.  Copenhagen has invested £40 per person per year over many decades in making it easy for people to walk or cycle.  Local authorities in the UK average £1 per person per year. 
 
Advances in neurosciences, which will throw light on the way we think, need to be linked to the social sciences and behavioural economics in a new way to deal with these problems. The UK government’s Behavioural Insights Team is doing randomised controlled trials to see what works in changing people’s behaviour.  It has found, for example, that sending text messages prompts increases of payment of court fines from five per cent to 20 per cent; subtle changes in the wording of corporation tax demand letters increases payment by three per cent.
 
“If it were really true that you could substantially change people’s behaviour by appealing to their sub-conscious, it does raise the question of whether it is actually ethically acceptable,”  concluded Krebs. “I don’t have an answer to it – but people will have to consider this if they approach were to take off.”

Click here for a pdf of the full Presidential address.

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