Nudge is the idea that careful rearrangement of individual incentives by a multitude of government (dis)incentives can get the market to do what social planners believe is best. Since individual and ultimately societal desires are generated by a multitude of material causes,... manipulation of those causes by a series of well-designed "pinpricks" will cause us to want what is "better" for us than whatever we would otherwise desire. Neo-classical economics championed by the Chicago School of Economics meets state planning.Various folks have questioned whether nudging works. To no one's surprise, at least not mine, President Obama's Social and Behavioral Science Team concludes it has, at least to some extent. Read a summary of the report in Politico here.
I expect that nudging at some levels on some matters would be effective. I am skeptical whether it would work where the choices are more than binary (e.g., opt-out vs. opt-in for enrollment in retirement savings plans) or where the nudge butts against intentionally-formed practices.