Not malice.
Not stupidity.
But incentives that reward behaviour which is misaligned with the stated goal — producing outcomes that are often the exact opposite of what was intended.
This post begins a new series. Its purpose is simple: to define what perverse incentives are, and to show just how widespread they have become across modern society. In later posts, we’ll look at how they might be reduced or avoided. But first, we need to recognise the scale of the problem.
What Is a Perverse Incentive?
A perverse incentive occurs when a system rewards behaviour that undermines its own purpose.
It is not about individuals behaving irrationally. On the contrary — people are often responding perfectly rationally to the incentives placed before them. The perversity lies in the system, not the person.
When incentives are misaligned, you can assume one thing with near certainty:
people will optimise for the reward, not the stated goal.
Politics: Power Before Principle
In democratic politics, we like to believe leaders are motivated by the public good. But electoral systems often reward something else entirely: short-term popularity and donor appeasement.
Campaign donations become access.
Access becomes influence.
Influence becomes policy distortion.
Politicians who rely on constant fundraising quickly learn which interests must be kept happy — even when those interests conflict with the broader public good. The incentive is not to govern well over decades, but to survive the next election cycle.
The result? Policies that look virtuous on paper but quietly serve concentrated interests at diffuse public cost.
Justice: When Impartiality Meets the Ballot Box
In jurisdictions where judges are elected, another perverse incentive emerges. Judges are meant to apply the law impartially — not to please voters.
Yet when re-election depends on public approval, judges face pressure to appear “tough,” “sympathetic,” or ideologically aligned with prevailing sentiment. Justice becomes performative. Sentencing decisions risk being influenced not by evidence or law, but by how they might play in a campaign ad.
A system designed to protect fairness ends up quietly eroding it.
Bureaucracy: Growth Over Outcomes
Large bureaucracies are often judged by inputs — budgets, staffing levels, program scope — rather than by outcomes.
If a department’s funding depends on demonstrating “need,” then solving the problem too effectively becomes a risk. Failure can be rewarded; success can be punished.
The incentive is to manage problems, not eliminate them.
This dynamic is visible across welfare systems, regulatory bodies, and international aid programs. The longer a problem persists, the more justification there is for the institution built to address it.
Academia: Publish, Don’t Question
Universities once prized truth-seeking. Today, many academics face incentives to publish frequently, align with fashionable theories, and avoid controversial conclusions that could jeopardise funding or reputation.
“Publish or perish” rewards quantity over insight.
Ideological conformity can be safer than intellectual honesty.
The incentive structure discourages dissent — even when dissent is precisely what scholarship requires.
Media: Outrage Pays Better Than Truth
Modern media operates in an attention economy. The incentive is not accuracy, nuance, or context — it is engagement.
Outrage spreads faster than explanation.
Fear drives clicks better than balance.
Confirmation beats correction.
Journalists may personally value truth, but the system rewards speed, sensationalism, and tribal reinforcement. The result is a media environment that inflames rather than informs.
Corporate Life: Metrics Over Meaning
Businesses often fall into the trap of measuring what is easy rather than what matters.
Sales teams chase short-term targets at the expense of long-term relationships.
Executives optimise quarterly earnings while hollowing out future resilience.
Compliance becomes a box-ticking exercise rather than a culture.
When bonuses and promotions are tied to narrow metrics, people will game those metrics — even if it damages the organisation itself.
Social Policy: Compassion Without Consequence
Even well-intentioned social policies can generate perverse outcomes.
Welfare systems that penalise work.
Housing policies that discourage construction.
Immigration frameworks that reward disorder over process.
None of these are born from cruelty. They arise when incentives are designed without accounting for human behaviour — and when ideology overrides realism.
The Uncomfortable Truth
Perverse incentives thrive in systems that assume people will act against their own interests for the greater good.
History tells us otherwise.
People respond to incentives. Always have. Always will.
When systems reward the wrong behaviour, they will reliably produce the wrong outcomes — no matter how noble the stated intentions.
Setting the Stage
This post is not about assigning blame. It is about diagnosis.
Before we can fix anything — immigration, justice, governance, media, or social cohesion — we must first ask a harder question:
What behaviour are we actually rewarding?
In the next posts in this series, I’ll look at how perverse incentives can be reduced, redesigned, or eliminated — and why doing so may be the most important reform challenge of our time.
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