Abstract:
The advent of behavioural economics and nudge theory provides new challenges for policy designers and regulators. These theories assume a different model of human behaviour than that commonly used by regulators, and also introduce a new type of governance – that of ‘libertarian paternalism’. This paper seeks to answer the question of how New Zealand’s regulatory design and law reform processes should adapt in light of these two developments.
This paper considers the regulatory impact statement process should incorporate a complementary behavioural economic model, whereas the case for a change to disclosure statements is less clear cut. It proposes that explicit and open consideration of behaviourally informed options regulatory impact statements increases the transparency and accountability of government, without decreasing their efficacy. As behavioural economics and nudging become more prevalent, the suggested changes aim to ensure that New Zealand’s law reform processes remain thorough and robust. This should allow complex policy issues to be translated into effective instruments.
