Nudging or Fudging: The World Development Report 2015

Abstract

The World Development Report 2015: Mind Society and Behaviour (World Bank, 2015), seeks a redesign of development policy on the basis of insights emerging from behavioural economics. This article offers a critical assessment of the Report across four dimensions. First, it situates the Report within the broader and evolving knowledge role of the Bank. Second, it locates the Report in the context of the evolution of economics as a discipline and how this informs the shaping of the Bank's development economics. Third, the Report is critically assessed for its narrow take on behavioural economics itself. Finally, the practical significance of the promotion of behavioural economics is considered through reference to its use in interventions in health in general and in response to HIV/AIDS in particular. It is argued that the Report suggests a dramatic and flawed reduction of what development is about, in that it forgoes any analysis of the structural problems facing developing countries and fails to propose major reforms to tackle these.

The World Bank on Mind, Behaviour and Society

“…This current article extends the work of Fine et al. () by arguing that the WDR 2015 should be read as part of a larger neoliberal shift in development policy and practice (Ferguson, ; Standing, ). Of particular note is how social and political complexity and contestation in relation to development have been depoliticized through the economization of social life (Madra and Adaman, ; McMahon, ).…”

“…In their article, Fine et al. (: 659) make a similar observation, stating that context, or what I refer to as social and political complexity, only emerges in the WDR 2015 to ‘the extent that it allows a better understanding of the choice architecture facing individuals, rather than drawing attention to systemic or structural issues bearing on why poverty is reproduced’. The stakes are high as the focus on individual behaviour and a reduction in the analysis of structural issues actively divert attention away from addressing these very structures.…”

“…The WDR 2015 has attracted attention from development scholars such as Fine et al. (), who analysed the World Bank's use of behavioural economics in the WDR 2015. This current article extends the work of Fine et al.…”

All that Glitters is not Gold. The Political Economy of Randomized Evaluations in Development

“…It sets out to redesign development policies based on a ‘richer view of human behaviour’, and the use of nudges (defined in the Report as, ‘A policy that achieves behavior change without actually changing the set of choices’; World Bank, : 36) to correct behavioural imperfections. This move is representative of the above‐mentioned entanglement of RCTs, behavioural economics and experimental economics (Fine and Santos, ).…”

1. The Social Question All Over Again

“…28 Applying behavioral economics to development and poverty, the policy recommendations prioritized focus on "nudging" the poor to change their cognitive and psychological predispositions and the social constraints that influence economic decision making. 29 This was essentially the logic of the World Bank's World Development Report 2015, even as the bank belatedly and reluctantly acknowledged that the trickle-down mechanism does not operate as earlier proclaimed. The report reads like a tour de force, a major reappraisal of policies not so long ago vigorously prescribed, but the recommendations are not followed up by any concrete steps to change the way the thoroughly deregulated labor market operates.…”