Better Choices

Here's a new way of thinking about government programs.

People make bad decisions all the time. They make unhealthy food selections, choices that hurt their wallets and actions that not only aren't in their own interest, but are not in the public's interest either. A new book by University of Chicago professors Richard Thaler and Cass Sunstein suggests, however, that people shouldn't always be blamed for those bad decisions. The government programs and private sector options meant to help make their lives better often are designed poorly, leading them to make the wrong call. A key flaw in government, the authors point out, is complexity. Look at the new Medicare prescription drug program. It has so many choices presented in such counterintuitive ways that seniors usually end up selecting coverage that is ill-suited for their needs.

In the book, Nudge: Improving Decisions About Health, Wealth and Happiness (Yale University Press, 2008), Thaler and Sunstein say a key problem is "choice architecture," or the way options are offered to people. Look, for example, at how food choices are presented in school cafeterias. If chicken fingers and pizza and cookies are displayed more prominently than veggies and fruit, kids are more likely to pick the junk food. For adults, mortgages and credit cards are presented with such complex descriptions that people often sign up for them without understanding what they're getting into-and without determining whether a better option exists.

Thaler and Sunstein are economists, so they have an innate belief in markets that offer choices. But, they note, the discipline generally assumes that people are rational and always act in their self-interest. Those assumptions are wrong, the authors argue. People often don't have the knowledge, time or concern to make the most rational, advantageous decisions. That's where choice architecture comes in. Instead of assuming that people always can make the most rational decisions, they should instead assume that people are busy and aren't experts in everything. They sometimes need help.

A choice architecture filled with "nudges" would encourage people to make good decisions. For example, the Medicare prescription drug program could automatically enroll people in a good option, but allow them to switch if they wanted to take the time to pick one that could be even better. Retirement savings programs should automatically enroll people, allowing them to opt out rather than to opt in. One program more companies are offering automatically boosts retirement contributions when employees get raises-that way they don't have to take the time each pay cycle to fill out forms to increase their contributions. Food programs should nudge people toward healthy options. If a school cafeteria had "banana day," kids might be more apt to choose fruit over cookies.

Why not just make decisions for people? Why not pick seniors' prescription programs for them? Why not take cookies out of the cafeteria? The reason is government planners are people, too. They don't always make the most rational choice themselves. "Those who are in position to shape our decisions can overreach or make mistakes, and freedom of choice is a safeguard to that," Thaler and Sunstein explain.

Brian Friel covered management and human resources at Government Executive for six years and is now a National Journal staff correspondent.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download

When you download a report, your information may be shared with the underwriters of that document.