Among the “eggheads” (to borrow a slightly dated term) dominating the upper tiers of the Obama administration – Summers and Orszag being perhaps the most prominent examples – Chicago law professor Cass Sunstein, named by Obama to head the Office of Information and Regulatory Affairs (OIRA), may be my favorite. Sunstein is brilliant, an unbelievably productive scholar – and, indeed, that presents something of hazard. Sunstein’s 2008 book with economist Richard Thaler Nudge: Improving Decisions About Health, Wealth and Happiness was widely read – and has generated much discussion about what it means for OIRA.

Nudge is among the best of a growing list of recent books offering a popular synthesis of contemporary research in behavioral economics. Perhaps no part of the analysis better illustrates its potential political hazards than Sunstein and Thaler’s (tongue-in-cheek?) endorsement of what they term “Libertarian Paternalism.” Hmm, sounds like fodder for the blogosphere. Govexec.com‘s Brien Friel observes:

The regulatory system that Sunstein will oversee if he is confirmed affects the decisions people and businesses make across the spectrum of human activity. Regulations for the display of information on credit card bills, for example, can influence how much people pay each month on their outstanding balances. Health care regulations can change their decisions about how they deal with illnesses. Rules for energy usage could substantially alter the use of electricity in homes and workplaces.

“Unfortunately, we often choose poorly,” Sunstein and Thaler explain on the Web site, http://www.nudges.org, on which they have a blog to discuss their theories. They contend that the design of both government and private sector programs often tempts people to make the wrong decisions. For example, lining check-out aisles in grocery stores with candy nudges people to eat junk food rather than healthier alternatives. Programs requiring employees to opt in to 401(k)s make it less likely that they will participate, while automatic enrollment would make it harder for them not to do so.

When Management Matters discussed Nudge last summer, many readers had a negative reaction, arguing that it smacked of Big Brother and heavy-handed government. Individuals should be free to make their own choices, rather than have Uncle Sam steer them in one direction or another, critics said.

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