Nudges appeal to the elite set; social cost studies to the radio listeners.

That’s an interesting hypothesis. I do wonder how much these justifications, however poor, actually matter for the public debate. Unless they re-frame policies such that it changes people’s intuitive reaction to them, there shouldn’t be much change in the ‘demand for paternalism’. The idea of nudges is a powerful framing mechanism but only for people who are already deeply engaged in the policy debate. For everyone else it may just be another euphemistic label in a newspaper headline.

That’s sad. I like the smoking cessation nudges that relate to time inconsistency but calling a cash payment a nudge is just silly.

I think my Mont Pelerin talk from a few years back holds up well. Thesis: where government covers most health care expenditures, pecuniary effects become policy relevant. Even in the case where your behaviour doesn’t change because of the cost externalisation, those bearing the cost resent it. Social cost figures get used to inflate the perceived pecuniary effects, labeling costs borne by users as costs to “society”, with the authors and commissioning agencies knowing full well that people hearing the soundbite will translate these into fiscal incidence rather than mostly being costs borne by users. Next, “nudge” makes paternalistic interventions seem less costly than they otherwise would. Social cost studies boost demand for paternalism; “nudge” pushes the supply curve out. And we’re getting to the new equilibrium.