The Budgetarian

Choice Architecture and Libertarian Paternalism on our money and voting behavior

FQ (Financial Quotient) - Rose Fres Fausto - Philstar.com
Choice Architecture and Libertarian Paternalism on our money and voting behavior

When my sons were still very young and had to be reminded to brush their teeth before going to bed, I gave them two choices. Because I knew that it was a bummer to interrupt the last few minutes of their playtime before they were tucked in bed at 8:30 p.m., I had to come up with choices that still made them feel in control but also assured me of them brushing their teeth. So, here’s how I presented the choices, “Are you going to brush your teeth now or after 15 minutes?” It was never nagging them with, “Are you going to brush your teeth or what?” Why? Because I didn’t want them to choose “or what.” I only offered them choices that were good for them.

Little did I know that I was using Choice Architecture (organizing the context in which people make decisions), or more specifically, Libertarian Paternalism, or should I say Libertarian Maternalism? 

Libertarian Paternalism is a term coined by the Father of Behavioral Economics and Nobel Laureate, Richard Thaler, and legal scholar Cuss Sunstein in their milestone book “Nudge (Improving Decisions About Health, Wealth, and Happiness)”. It is the idea that it is both possible and legitimate for private and public institutions to affect behavior while also respecting freedom of choice. It is paternalism in the sense that it tries to influence choices in a way that will make choosers better off, as judged by themselves. And yet, it is still libertarian because it aims to ensure that people should be free to opt out of specified arrangements if they choose to do so. They still have the choice.

Let’s go back to the brushing of my young sons’ teeth. All of them want to have healthy teeth and avoid painful toothache caused by tooth decay, but the present fun of playing can get in the way of ensuring their regular dental care. As their mother, I had the responsibility to play the role of the responsible Choice Architect so the options presented for them to choose from were both good. They were nudged to do what was good for them. It became easier for them to do the right thing.

If we examine our life and those of successful people, I am sure you are bound to discover that the secret is in the design. While we tend to put too much weight on will power, especially in the stories of our heroes who succeeded against all odds, we sometimes tend to overlook the importance of the design, the choice architecture that was put in place, knowingly or unknowingly, that made it easier to achieve desired outcomes. 

It is the same in the way we handle our money. Let us not put too much weight on our ability to resist shopping online while we keep all the shopping apps with notifications on, or to consciously save and invest each payday, with matching regular decision-making on where to invest, what stocks to buy while we see the market fluctuations every day. Let’s come up with the design of our everyday life so that saving and investing will be done as effortlessly as possible. Let us do Libertarian Paternalism on our financial behavior! (I have discussed automating saving and investing in previous articles as the key.)

The same is true in the way we choose our leaders. The election heat is on, and Filipinos are now watching the five presidential candidates who are vying for the country’s top post come May 9, 2022. I can’t help but think about applying Libertarian Paternalism on this exercise.

Ideally, voting is a rational exercise. But in reality, it is nothing but the opposite.

We need to summon all our Makatwirang Mak (our rational brain) so that we can choose the president who can lead us and bring the Philippines to its fullest potential both economically and morally. We need a president with integrity and industry, walang bahid ng korapsyon, masipag at may malasakit sa kapwa,ika nga. But what is happening is this: We allow our Emotional Emong (our emotional brain) to make that important decision, then we only summon our Makatwirang Mak to rationalize that decision.

Everyone talks about wanting to have opportunities for all Filipinos so that we can improve our economy and family lives. Everyone shouts no to corruption, and yet, the candidate on top of the survey is the exact opposite of all these ideals of integrity and industry.

So, what sort of Libertarian Paternalism can be done? 

We already have a very low set of minimum requirements for presidential candidates:

  1. Natural born Filipino
  2. Registered voter
  3. Able to read and write
  4. At least 40 years old on the day of election
  5. Must have resided in the Philippines 10 years before election date

We require much higher qualifications for jobs that carry just a fraction of the responsibilities of a president; unfortunately, we can’t do anything about these now because they’re in the Constitution. But according to our Omnibus Election Code, the following are disqualified from running for public office:

  1. Those declared as incompetent or insane by competent authority.
  2. Those sentenced by final judgment for subversion, insurrection, rebellion, or any offense for which he has been sentenced to a penalty of more than 18 months imprisonment.
  3. Those sentenced by final judgment for a crime involving moral turpitude.
  4. Those who are permanent residents of or immigrants of a foreign country, unless he has waived his status as such.

In the same light as we should weed out all the obvious bad choices for our children, we should also weed out those who are disqualified in order to leave better choices for the emotional voter. I do not subscribe to the idealistic and overconfident thinking of, “It’s better to beat him at the polls.” This ignores the fact that we vote with our emotional brain instead of our rational brain as discussed earlier. 

Let us not be naïve. I checked our recent election results, and we are a bunch of “Di na natuto” people. We keep voting for candidates who have done us wrong. In 1992, the first elections after the EDSA revolution where Ramos won, do you know that Imelda Marcos got 10.32% of the votes, even beating the honarable and bar topnotcher Jovito Salonga? In 2010, the elections where Noynoy Aquino won, do you know that the ousted Erap Estrada came in second? 

Let’s also remember that crime lords are not caught and jailed because of their big crimes. They are caught and arrested for their “smaller offenses” such as tax evasion. Check out the stories of Al Capone and other organized crime lords. 

Just like the brushing of teeth choices that I used to give my sons, I hope the Comelec can please weed out those who are disqualified already to give our country, our children, our children’s children a better future.


1. Join our conversation with Nicole Alba, a young student who became popular with her YouTube videos on finance. 

2. I’ll be guesting on Thirsty and Thirsty on Feb. 2, 2022, 6 p.m. 

3. If you want to have a financial planning and wealth advisory services to build your own financial blueprint tailor-fit to your goals. Book a free exploratory call with us! Click https://calendly.com/ife-fin-arc/explore

4. To learn more about your money behavior, get your copy of FQ books and for your loved ones too. The principles you will learn from here are not only applicable in your financial life but all the other important aspects of your life. https://fqmom.com/bookstore/  Insert Book poster

To know more about FQ Book 2, watch this short video.

5. If you haven’t taken the FQ test yet, or have taken in on or before August 2021, it may be time to take the test again. FQ Test poster


This article is also published in FQMom.com.



  • Latest
Are you sure you want to log out?

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

or sign in with