Wharton's Katherine Milkman talks to author Cass Sunstein about his new book, Simpler: The Future of Government.

In the past few years, the United States government has issued fewer regulations and worked to eliminate or improve existing ones. Cass R. Sunstein led many of these changes as administrator for the White House Office of Information and Regulatory Affairs. In his new book, Simpler: The Future of Government, Sunstein talks about how a more streamlined government can improve health, lengthen lives and save money. Wharton operations and information management professor Katherine L. Milkman recently spoke with Sunstein about these changes and what the future holds.

An edited transcript of the conversation follows.

Katherine L. Milkman: Thank you for taking the time to speak with me today about your new book, Simpler: The Future of Government. You report in Simpler that when the world-renowned behavioral economist Daniel Kahneman unexpectedly called you on the phone in the mid-1990s, you awkwardly blurted out, “You’re my hero.” I have to say that I’m one of many young scholars who place you in the hero category. It’s an honor to have the chance to chat with you today about some of your latest work.

Cass Sunstein: Thank you so much.

Milkman: I want to dive right into asking you a few questions about your book. In Simpler, you write about many initiatives you led while heading the White House Office of Information and Regulatory Affairs (OIRA) that were designed to make people’s lives better by simplifying the government. Which initiative are you the most proud of, and could you tell us a little bit about why?

Sunstein: There are a few. The regulatory look-back — which is an effort to go through all the rules on the books and to see which ones are sensible and which ones are outmoded and which ones cost too much and which ones are too complicated — would probably be toward the top of the list because it’s structural, rather than a one-shot [deal]. The second thing that I immediately identify is that there is a provision of the President’s Executive Order 13563, which seeks to consider and identify approaches that maintain freedom of choice and reduce costs. It specifically calls out disclosure of information warnings and appropriate default rules. The information disclosure in the President’s executive order is supposed to be salient to consumers. I see that provision of the executive order as [being] connected with a lot of work that you and others have done that can really help people without mandating or banning anything. That’s also structural….

In terms of other things, the elimination of the food pyramid and the substitution with the food plate is something that I feel pretty good about, on the ground that there’s reason to believe the pyramid was just too confusing and not helping people to make informed choices. I was one of a number of people who played a role in conceiving and helping to create the basic orientation of the Consumer Financial Protection Bureau. The Consumer Bureau has as a mantra, “Know before you owe.” I think that’s a pretty good mantra. Generally, in that office, I was privileged to have participated with many others in trying in multiple domains to figure out what can we do that will help people maybe have longer lives, better health, a little more prosperity without hurting the economy at a tough time. That general orientation, I think, was the right one in a very challenging time economically.

I just identified one more. I and a number of others were interested in automatic enrollment and ways of getting people benefits or permits without having to be overridden by transaction costs. There’s one rule that I’m especially pleased with, which gives hundreds of thousands of poor children [access to free] breakfast and lunch, to which they are legally entitled, but which they had not been getting because the enrollment process was cumbersome for them. What happened was we directly certified them because we knew they were [qualified]. If small children are getting to eat when they are legally authorized to [do so] as a result of an initiative that takes away costs and burdens, that’s something you feel good about.

Milkman: Speaking of regulatory look-back, I wanted to ask you about whether there were any initiatives you led while at OIRA that you feel were failures, at least to some degree? If so, could you describe one that was particularly memorable and what you learned from it?

Sunstein: As part of the executive office of the President, I would like to think of these not as initiatives that I led but as initiatives that I played a part in. One thing that was instructive to see in the federal government is that the President is the leader and everyone else is part of the team. There were some things where, in some formal sense, I had to lead. But I had partners who were as important as I was or more important than I was. So that’s how I thought of the process and how it really works from the inside.

I’m pleased to say that I can’t identify anything that was a failure. There are things that remain challenges, and one thing that I have been very focused on since leaving government is the implementation of the Affordable Care Act, especially the applications for enrollment in the [health insurance] exchanges, which are coming in the not-distant future. There’s a risk that if the applications are very difficult and confusing, then the exchanges won’t work the way everyone hopes they will. I know there’s been a lot of reasonable concern about undue complexity for people who aren’t used to dealing with long forms. Just [recently], the Department of Health and Human Services announced a radically simplified form. So they met that challenge.

In the federal government, my own experience was that there weren’t failures; there were things that all of us would have liked to have seen [come together] a little faster, either something from Congress or something involving internal processes. But when they don’t happen from Congress, I think [the reason] is familiar: partisan divisions. When it doesn’t happen within the executive branch with the speed that the enthusiasts hope for, the reason is that a lot of smart people are working together to make sure that [an initiative is] ready for prime time. Even when things didn’t happen as quickly as I would have liked at the time, I can see in retrospect that it’s a safeguard against error.

Milkman: I want to dive in a little deeper to something you just mentioned — the new health care act as a major challenge moving forward. You also mentioned, in your book, tax simplification as a major challenge that you hoped would be tackled in the future by Congress and OIRA. Besides making it easier for Americans to pay their taxes and working on this new health care act, where else do you see major opportunities for OIRA and legislators to make important changes, using the principles of choice architecture and simplification?

Sunstein: There are a lot of them. I think that obesity is a key challenge for the next generation. The First Lady is certainly keenly interested in this. The private sector has taken some initiatives with respect to school lunchrooms and cafeteria design to try to use choice architecture to promote healthy eating. There is a lot of thinking that the can be done about what the private sector should be doing, which may or may not be economically desirable for profit makers in the short term. Tasty, high-calorie food often sells, so there are private-sector questions to be asked. Some of the most agile and public-spirited companies in the coming years will be able to do well and do good with choice architecture. There’s a lot of thinking to be done about public/private partnerships. Michelle Obama and others in the White House have worked closely with the private sector to try to think about what can be done together to reduce calories and reduce salt [in food]. There are questions to be asked on the regulatory front about nutritional labeling and calorie labeling. That rule remains to be finalized. What should that look like? What should coverage be? What really works and what doesn’t? We don’t have complete information about that.

I do think that a big choice architecture challenge remains smoking, where we issued a graphic warnings rule that was intended to make sure people really had a vivid sense of the risks associated with smoking…. That has been invalidated by a federal court, which I think was a mistake. Nonetheless, it happened, so the FDA has to rethink what it is going to do in terms of tobacco warnings. Hundreds of thousands of people die every year from smoking, and that’s a significant choice architecture challenge. It’s not technically a health care implementation job, but of course, it has a health dimension front and center.

Distracted driving is currently a problem. It’s going to be a challenge, no question, for the next generation because when that little red light goes on, system one in the head often says, “Oh, I should probably attend to that, even if I’m supposed to be attending to the road.” So figuring out what we can do to save some lives there would be a pretty good idea.

There’s a lot to be done in terms of testing empirically what works and what doesn’t. We made a good start, but the empiricization of federal government actions is a continuing project and there isn’t anything more important. I would say the structural point to have randomized control trials being conducted by the government and used by the government more pervasively than has been done to date would be a very good development and would help orient a lot of efforts going forward.

I do think that there are some empirical challenges that are a little technical, but are very important to meet, one of which is to get very clear on the health risks associated with particulate matter. This isn’t strictly speaking behavioral, but it is empirical and it’s a scientific question…. Because scientists continue to debate exactly what the health risks are of particulate matter and whether the risks are variable across different kinds of particulate matter, it would be really very good to get clear on that.

Milkman: That’s a great list of challenges moving forward. On that note, I’m sure you’re very well aware of the fact that a number of countries outside of the U.S. are beginning to build choice architecture departments into their governments, meaning departments that specialize in simplifying complexity and helping people make better decisions without restricting their freedom to choose. You and Dick Thaler have referred to techniques that guide choices in wise directions without restricting individual freedoms as “nudges.” The U.K. now has a so-called “nudge” unit. The Australian government is getting involved in the movement as well. Do you see a need for such a group in the U.S. federal government or in state governments? If so, what do you think such a group, or groups, should look like?

Sunstein: I do think that the U.K. behavioral insights team is doing terrific work. I’ve actually worked quite closely with them about overlapping interests. I was there not long ago and talked to them at length about what might be done going forward.

I wouldn’t say there’s a need for such a unit in the United States. I think there is great value in bringing to bear (a) behavioral insights and (b) empirical tasks into government. The approach that we took in the first term of the Obama administration is not as a separate team, but to have a number of people who were alert to the potential value of low-cost, freedom-preserving tools. Also, the President has been very clear and supportive of automatic enrollment and savings plans. There’s a large catalogue of things that people in the Obama administration were interested in, and a lot of them had bipartisan support. It’s not clear there is a need for a dedicated unit. There is a need for the problem-solving tools, and there’s a need for an emphasis on the empirical.

Whether a dedicated behavioral unit is a good idea, I think it’s hard to say in the abstract. It may be that you’ve got what it would give you already in the DNA of a government. On the other hand, in the U.K. it’s been terrifically helpful, and it wouldn’t be at all surprising if a state found it very useful to have a small team that was focused on this. It might well be useful for the United States to have that, too, as a government. But I think what’s most important is the problem-solving capacity and not necessarily a dedicated unit.

Milkman: That makes a lot of sense. Thanks for sharing those thoughts. I want to wrap up by asking you one last very short question. You report in Simpler that when asked on a first date by your now wife, Samantha Power, about your dream job, you responded, “OIRA.” Now that you have had that job, I want to pose the same question to you again. If you could have any job in the world now, other than law professor, what would be next?

Sunstein: Economics professor.