Behavioralizing Europe: Behavioral Economics Enters EU Policymaking

Some speculated that the global financial and ensuing Eurozone crisis would challenge orthodox, neoclassical economics and the dominance of neoliberal economic policymaking in the EU. While neoliberal economic policies appear more resilient than expected, there is one economic policy paradigm that clearly benefited from the crisis: the booming field of behavioral economics. Emphasizing cognitive bias and the limited rationality of economic behavior, it promises to offer policy guidance for the post-crisis world. It is therefore not surprising that in the past years, behavioral economics has made steady inroads into EU policymaking, most notably in the areas of consumer policy and health and food safety.

This paper evaluates the rise of behavioral economics as a policy paradigm within EU policymaking. After presenting its key approaches and insights, it first charts how behavioral economics has filtered into EU policy. In what policy areas did it emerge and what insights were imported? It secondly maps the type of actors and organizations that were instrumental in disseminating behavioral economics. How did these actors translate theoretical insights into EU policy? It finally aims to determine to what extent behavioral insights are changing the policy outlook of the EU. How are behavioral approaches affecting the political rationality of EU policy and do they present a break with reigning (neo-)liberal policy views. The paper concludes by arguing that while behavioral approaches to EU policy remain modest, they present a formidable shift in the political rationality of EU governance with potentially far-reaching political implications.