There is a common thread to the literature on "nudges" in public policy derived from behavioural economics, and the literature on randomized control trials (RCTs) as a new methodology in development economics. Both are based on realistic assumptions about the psychology of citizens and aspire to change things in the margin, leaving aside "big questions" about how society is structured. This is fine as long as there is a recognition that these are small changes, and therefore should not be associated to big reformulations. Jeremy Waldron in the New York Review of Books criticizes the last book by Cass Sunstein, "Why Nudge?" because a single focus on choice architecture (that is what nudging is about) does nothing to alter social architecture. Waldron argues that "choice architects nudge almost everything I choose and do, and this is complemented by the independent activity of marketers and salesmen, who nudge away furiously for their own benefit. I’m not sure I want to live in nudge-world, though—as a notoriously poor chooser—I appreciate the good-hearted and intelligent efforts of choice architects such as Sunstein to make my autonomous life a little bit better. I wish, though, that I could be made a better chooser rather than having someone on high take advantage (even for my own benefit) of my current thoughtlessness and my shabby intuitions."
Some years ago, Martin Ravaillon reviewed the book by Duflo and Banerjee "Poor Economics" because it sells marginal reforms based on randomized control trials as "A Radical Rethinking of the Way to Fight Global Property". Besides the methodological issue that RCTs cannot be the only empirical strategy in a messy and complex data world, Ravaillon argues that "poor countries are not doomed to stay quite so poor, the cycle of self-fulfilling expectations of poor service delivery to poor people can be broken, better public programs and policy reforms can be devised and shown to work, even while many deeper problems of market and governmental failures remain. But please let us not neglect those deeper problems."
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