Libertarian paternalism

What is libertarian paternalism?

Libertarian paternalism is a policy approach that aims to influence choices in ways intended to benefit the people choosing while preserving their ability to choose otherwise. The welfare aim and the freedom to refuse are both parts of the proposal.

Choice architecture and libertarian paternalism

Thaler and Sunstein (2003) argue that institutions often must choose defaults, ordering, and other features of a decision setting. They propose using those choices to promote welfare without coercion.

Example: automatic retirement-plan enrollment

Automatically enrolling employees in a retirement plan while providing an accessible opt-out is a standard illustration. Whether the arrangement benefits the affected people must still be evaluated; increased participation alone is not a complete measure of welfare.

Criticisms: who decides what is better?

The approach proposes a way to address the tension between welfare and autonomy. It does not settle that tension by definition. Questions remain about how welfare is judged, how easily people can refuse, and whether the arrangement is transparent.