Obama administration extends 'nudge' approach

Significance

'Nudge' thinking provides an alternative to public policies predicated on large expenditures of public funds, despite questions over its overall efficacy and the morality of its methods.

Impacts

• Insights from behavioural economics can be deployed by NGOs and other stakeholders in promoting certain outcomes.
• The use of such tactics may increase in importance if policy gridlock continues to prevail in Washington.
• Nudge thinking may be used to induce unbanked individuals to use basic financial services.