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38 - Nudging Compliance

from Part VI - Compliance and Cognition

Published online by Cambridge University Press:  07 May 2021

By
Elena Kantorowicz-Reznichenko  and
Liam Wells
Edited by
Benjamin van Rooij  and
D. Daniel Sokol
Benjamin van Rooij
Affiliation:
School of Law, University of Amsterdam
D. Daniel Sokol
Affiliation:
University of Florida
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Summary

Abstract: In recent decades, a new approach to regulations and compliance was developed to complement the traditional instruments, such as command-and-control and economic instruments. This approach is termed ‘nudging’ or ‘choice architecture’ as it proposes to design the environment in which individuals make choices, in order to promote welfare enhancing behaviour. By utilising insights from behavioural sciences, nudges direct people’s behaviour without limiting their choices. In this chapter, we explain the concept of ‘choice architecture’ and review specific ‘compliance nudges’ in both the public and the private spheres. These include – amongst others – nudges that promote tax compliance, guideline-compliant drugs prescribing, and timely loan and fee repayments. The reviewed nudges include salience nudges, which emphasise certain aspects of a choice to make people focus on it; moral suasion nudges, which make more visible the moral consequences of people’s decisions; and descriptive or injunctive social norms nudges, informing people what others are doing or believe should be done. Furthermore, we discuss the empirical literature demonstrating the effectiveness (or lack of it) of compliance nudges. Whilst it is not easy to compare the effectiveness and cost-effectiveness of these nudges across different fields of application, some conclusions are reached regarding the effectiveness of compliance nudges in general. Finally, we point out the limitations of nudging compliance, compared to the traditional tools, and present some thoughts on possible future developments. The area of nudging compliance has the potential to develop rapidly as technological advancements make compliance monitoring, and automated nudging, possible. Whilst nudging is a promising way forward in compliance, ethical questions remain about the proper extent of its use, and further research is required into the long-term effectiveness of this technique.

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The Cambridge Handbook of Compliance , pp. 551 - 568
Publisher: Cambridge University Press
Print publication year: 2021

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