Tuesday, July 20, 2010

Perverse Incentives?

Matt Zeitlin:
The problem is that the response to every terrorist attack is to give more money and fund more programs and then giving these intelligence programs and agencies more power to do more and more and more. This creates a weird incentive for people in the intelligence and counterterrorism communities whereby more failures and attacks lead to more money and power. That, needless to say, is not how you want to set up any organization.

What's interesting, to FLG at least, is that conservatives make almost the exact same argument about the progressive programs that Matt favors.

The problem is that the response to every social problem is to give more money and fund more programs and then giving these government bureaucracies and agencies more power to do more and more and more. This creates a weird incentive for people in the government bureaucracies to create more failures and that lead to more money and power. That, needless to say, is not how you want to set up any organization.

Now, in fairness, FLG does think that more effort is given toward determining the effectiveness of social programs. However, he doesn't think this is necessarily some evil conservative plot against the virtuous liberals who want to do the right thing. It's a function of the difficulty in measuring the effectiveness of counter-terrorism, which is to say measuring that something didn't happen. Whereas, social programs are usually designed with some specific metric or metrics involved. Then again, perhaps this is because of the inherent nature of conservative versus liberals, But not so much a nefarious plot.

In truth, though, FLG thinks Matt's, as well as the corresponding conservative analysis, is off-point. True, if you look at the intelligence community as a whole, then it has an odd monetary incentive to fail. Likewise, if you look at the public social infrastructure, then so does it. But there are other levels of incentives, such as agency and individual, many of which can be non-monetary. To the extent that agency or individual failures have consequences, then the problems at the more macro-level can be mitigated.

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