Content area
Full text
Oliver Adam , The Origins of Behavioural Public Policy (Cambridge : Cambridge University Press , 2017), 195 pages. ISBN: 9781108225120. Hardback $74.99.
Book Review
The Origins of Behavioural Public Policy by Adam Oliver is a well-timed contribution to debates surrounding an increasingly influential approach to policy analysis. In the last decade, theoretical and empirical insights from the behavioral sciences have had a transformative impact on issues of public policy and governance. Several major governments, including the United States, the United Kingdom, and Germany, as well as global institutions such as the World Bank, have assembled behavioral insights teams -- popularly known as "Nudge Units" -- to systematically integrate lessons from behavioral research into their policy agendas. The awarding of the 2017 Nobel Prize in Economic Sciences to Richard Thaler, a pioneering voice in behavioral economics, is further testament to the growing resonance of behavioral ideas. It is against this backdrop that Oliver, a behavioral economist himself, provides a compact and informed account of the intellectual development, theoretical foundations, and practical application of behavioral public policy (BPP).
Oliver's text encompasses 10 self-contained chapters that reflect four themes. First, the book traces the development of behavioral economics, the discipline identified by the author as the cornerstone of BPP, within a broader discussion of human rationality. Contrary to the received wisdom of many economists, people do not always act as if they wish to maximize their expected utility -- that is, the individual value obtained through consumption of a good or service -- and their decisions often contradict the axioms of rational choice theory (p.ￂ 15). These deviations "have tended to be systematic, and therefore cannot easily be attributed to random error in people's choices" (p.ￂ 34). This basic but important insight provides the empirical basis of behavioral economics. To support his case, Oliver cites diverse work on choice behavior, notably, prospect theory and research on heuristic-led judgment, which challenges the validity of rationalist axioms (pp.ￂ 25-36).
Second, the author develops this line of thinking further by highlighting three areas of inquiry -- time, utility, and money -- in which studies have returned findings that contravene conventional economic assumptions. For example, present bias -- that is, the tendency for preference formation to be weighted heavily toward considerations of...