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E
ight years ago, the always prolific University of Chi-
cago Law School professor Cass Sunstein (he is now at
Harvard) teamed up with a colleague, Richard Thaler,
a University of Chicago economist, to publish
Nudge:
Improving Decisions about Health, Wealth, and Happiness
. It was a
sensational success, and of particular relevance to anyone work-
ing on policy and program delivery. The book drew heavily on
psychology and behavioural economics to make the case that
governments could play an important role by setting particular
defaults in the choices individuals make in dealing with various
government services. In so doing, it would likely deliver a better
service at a better price to most people. That suggestion of an al-
ternative—the “nudge”—was not a dictate. It was merely a sugges-
tion, but one that was likely to be accepted by any given citizen.
The idea took a long time to penetrate government offices. Sun-
stein joined the Obama administration in 2009 and for three years
directed the White House Office of Information and Regulatory
Affairs. In 2010, the United Kingdom government created the Be-
havioural Insights Team (known as the “nudge unit”) in cabinet
office. (BIT is now a partnership between Cabinet Office and NES-
TA, an policy think tank. BIT has done innovative work around
the world with behavioural economics. Its staff has written re-
ports on the behavioural science of recruitment and selection, a
study on how and when mobile phones are stolen in the UK, and
the behavioural insights around organ donation—just to name a
few of their more recent projects.)
Many are heralding units like BIT as the future of evidence-
based decision making, and the use of nudging is held up as a
prime example of the benefits of this new approach. The Austra-
lian Tax Offices have also successfully employed nudging tech-
niques and the United States recently launched a Social and
Behavioural Sciences Team that explores, among other things,
nudging.
With no obvious champion in Canada, the idea took a lot longer
to win adherents. One basic decision proved a hurdle: if citizens
are to be “nudged,” what should the default be? At the CRA, an
even more basic question emerged: could it harness the power of
the nudge to get people to pay their taxes on time? In Canada, 94.5
percent of adults pay their taxes on time.
It decided to experiment to see how to nudge the other five per-
cent to submit their tax returns on time. “There are a number of
ways that nudges can affect behavioural change with regard to
taxes. For example, a commonly cited study from the U.K. found
that when individuals who owe taxes are told that most people
pay their taxes on time, they are more likely to comply,” said
Philippe Brideau, senior spokesperson with the CRA.
The experiment was nominated for an Institute of Public Ad-
ministration of Canada Innovative Management Award in 2015.
Simply put, the experiment involved writing letters to people
who owed taxes. Some letters nudged the recipient to pay taxes
and then to check how they compared to their peer group, while
26
/ Canadian Government Executive
// March 2016
Strategy
CRA’s Nudging Ways
Jeff
Mackey
Patrice
Dutil
At the CRA, an even more basic
question emerged: could it harness
the power of the nudge to get
people to pay their taxes on time?