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| When Nudge Turns to Shove |
| Governments should hold back when it comes to taxes promoting healthy eating |
| by Haig Simonian, our external editor |
Two thirds of deaths are caused by noncommunicable diseases – narrowed arteries, diabetes, obesity, and the like. The risk of suffering from these can be reduced by sensible lifestyle choices, such as regular exercise, healthy eating and avoiding booze and cigarettes.
That is among the reasons why governments around the world are turning to a variety of policies to encourage such practices for the benefit of individuals. Better lifestyles would also ease the immense financial strains on increasingly stretched public health systems buckling under demographic pressures like rising life expectancy and ever pricier drugs.
But when does ‘nudge’ – the concept in behavioral economists to use incentives or disincentives to influence behavior – turn to ‘shove’, an overzealous attempt by policymakers to guide our actions and potentially curtail our freedom of choice? And are many policy issues not better left to the private sector and market forces, rather than state intervention?
These are the themes explored in a fascinating new study on health policy by Avenir Suisse experts Diego Taboada and Jérôme Cosandey. They note the rising popularity around the world of taxes not just on alcohol and tobacco but, increasingly, on sugary drinks and salty snacks. Some 40 countries now impose levies on sugared drinks, for example, with more than half of those having been introduced within the past seven years. Even relatively liberal Switzerland has been tempted, especially in French speaking cantons.
But are such nudges wise? And are they effective? The authors acknowledge the importance of noncommunicable diseases and the rather high consumption per capita of sugar and salt in Switzerland, suggesting lifestyle choices could play a part in reducing mortality. But they also note something evident to every visitor to Switzerland: most locals appear – on the face of it at least – a pretty healthy bunch. A stroll through any Swiss city shows fewer obese individuals than in most other European countries, and mobility scooters are conspicuous by their absence. Fabulous scenery, clean air and plentiful lakes and rivers offer the Swiss strong natural incentives to exercise without the need for any overt government intervention.
Indeed, annual consumption of alcohol, tobacco and sugar has been falling gradually for years. Likewise salt, red meat and most dairy products, with the exception of cheese. Meanwhile healthier plant oils have been steadily replacing fattier alternatives.
That has in large extent been thanks to the private sector, rather than state intervention. Nestlé’s slogan ‘Good Food, Good Life’ shows that the world’s biggest industrial foods group has for years been adjusting the composition of its products and has ditched some less healthy lines. Critics may argue that has been to boost margins rather than from any inherent concern about public welfare. But many big foodmakers have, for example, been reducing the sugar in their breakfast cereals – a perceived ‘healthy’ product that in fact is significantly less so than most buyers think, as part of the Milan Declaration, a sector initiative that gathers ten large producers. Salt has gone much the same way, while protein rich plant and insect-based products have been researched and developed to substitute meat.
Such private sector initiatives, argue the authors, are more appropriate than potentially clumsy state intervention. And Switzerland’s ‘softly’ approach of bringing manufacturers and health policymakers together has been relatively successful compared with the more bureaucratic state interventions elsewhere.
That is because government attempts to influence behavior by taxing ‘unhealthy’ products carry assorted risks. Slapping on special levies, for example, is regressive, disproportionately affecting lower income households. Levies are also inefficient, as they do target all the consumers, not just those who happen to consume too much of potentially unhealthy products. And intervention opens the door to bundles of red tape. Who decides which products to tax? At what rates? What of imports? And how to implement controls?
Avenir Suisse highlights a final, often noted, flaw – namely that, no matter how noble the motives, government policies can themselves be hypocritical or even contradictory. Virtually around the world, hefty taxes are imposed on alcohol and tobacco. Ostensibly that is to curb consumption. But those very taxes are often the bedrocks of key government budgets. In Switzerland, for example, the roughly CHF 3 billion a year raised from duties on tobacco, alcohol and gambling go a long way to supporting the state pension system. Contradiction indeed. |
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| Avenir Suisse is the leading Swiss think tank which promotes open-market ideas in economics, politics and society at large. Although continuing to publish on Switzerland’s domestic politics, the think tank aims to address Switzerland’s growing importance in the international community and global economy. Avenir Suisse’s English-language monthly newsletter aims to reunite people and institutions interested in obtaining regular valuable insights on Switzerland, useful in international discussions and as a source of
comparisons. |
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