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Political Research Exchange - PRX

Nudging Before the Nudge? Behavioral Regulation and Rise of the Behavioral Economics

Rüdiger Graf
Ruhr-Universität Bochum
Rüdiger Graf
Ruhr-Universität Bochum

In the debates on Behavioral Economics, especially the proponents of nudging techniques, and a so-called “libertarian paternalism” generally emphasize the novelty of their regulatory approach focusing on the heuristics and biases of decision-makers in order to influence but not force certain types of behavior. In my paper, I will scrutinize this claim to novelty and ask how the approach actually is. Focusing on the regulation of traffic and environmental behavior in (West) Germany since the 1970s, I will argue that practices that can aptly be described as nudging had already formed an element of the regulatory toolbox before they became a political program. Thus, rather than being the heroic inventors of a new paradigm, behavioral economists were part of a broader trend to observe and control human behavior that characterized the second half of the 20th Century. Even taking this broader context into account in which behavioral economists offered solutions to various policy issues, their fast rise to prominence over the last decades still needs to be explained. My explanation will be threefold: first, nudging appears as a highly attractive regulatory strategy in an era of deregulation, offering to influence individual market behavior and producing large effects with comparatively small means. Secondly, it complements neoliberal governementality offering a psychologically more realistic self-perception and, thus, optimization techniques. And, finally, the self-marketing of all methods concentrating on behavior as behavioral “economics” lends the credence of a respected discipline to otherwise rather dubious psychological tactics.
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