Incentives Are Everything

You can use this heuristic or rule of thumb in your private life, as well as in a work setting. If a salesperson is paid a commission on the basis of sales, but not the contract terms, you can safely predict they will make sales without regard to whether the terms are good or bad for the company. Indeed, it is best for the salesperson to simply accept whatever contract is put in front of them because the deal goes through faster.

If you ask a work colleague for help, expect them to be thinking the following: “Why should I pay attention to you? How will it help me now? Can I ask you to help me later? Will I get in trouble if I don’t help you? How much help do I have to give you?” These calculations are automatic, and often not even explicitly considered. You can improve your chances of success by remembering that your colleague is evaluating your request in terms of what it means to them, not what it means to you. You can then tailor your request accordingly.

Incentives work on the scale of institutions as well. Take Congress … please. Congress’s job as described in the Constitution (see Congress Gets A Grade) is not the same as what most members of Congress are incentivized to do. That is, they want to get re-elected. Let’s explore what predictable behaviors the incentive to get re-elected creates.

You might think that solving the nation’s problems sounds like a really good way to get elected. In practice, solving big problems is really hard, and even if you do people are ungrateful. The phrase “no good deed goes unpunished” exists for a reason.

Well, if solving problems is a bad idea, how about talking about problems? Now that’s something our members of Congress can do. Not only that, the more pressing the need, the more dire the suffering, the more Congress appears necessary. By contrast, when they’ve solved a problem, what do we need Congress for any more?

The natural and predictable, but absolutely undesired, result is that members of Congress are incentivized to exaggerate problems, neglect to solve them, all while furiously passing new laws. See Congress Is Performing As Expected.

Here are ten ideas to change incentives to improve politics: Ways To Make Politics Better. Send me your ideas and we’ll expand the list.

Be well.