Comparison of Nudging Effects in Developed and Developing Countries: An Analysis of Behavioral Nudging Techniques and Their Effectiveness

Hwiseong Seo, Seoul Academy Upper Division 422, Yeoksam-ro, Gangnam-gu, Seoul
Chan Lim, Korea Kent Foreign School 13, Jayang-ro 35-gil, Gwangjin-gu, Seoul
Volume9 nos.1 February 2025 ISSN 2755-3272

Keywords

Behavioral Nudging, Savings Rates, Sub-Saharan Africa, Financial Education, Tangible Reminders, System Adjustments

Abstract

This research paper examines the effectiveness of diverse behavioral nudging techniques in increasing savings rates among employees in sub-Saharan Africa. Given the region’s sig- nificant paucity in retirement preparation and financial security, the study aims to identify the most impactful strategies to promote savings. Demonstrating evidence from various interven- tions such as tangible reminders, financial education, and system adjustments, the study reveals that tangible reminders are notably effective in enhancing the savings behavior of sub-Saharan Africans. However, system adjustments on saving systems are generally improper, except for the promotion of mobile banking. In contrast, financial education demonstrates inconsistent results and sometimes presents insignificant or negative effects on promoting financial savings, influenced by educational levels and regional contexts, indicating that financial education may not be the foremost method for sub-Saharan Africa. Succeeding from the experiment’s conclu- sion, the research additionally asserts the necessity of further research to explore the underly- ing reasons for the differing impacts of financial education on savings behavior across various regions and educational backgrounds. Understanding these dynamics will be crucial for cre- ating targeted and effective savings promotion policies tailored to the unique socio-economic conditions of sub-Saharan Africa.