Non-Binding Resolutions

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2 responses to “Non-Binding Resolutions”

1. 

   Jason Black

   2007-05-01

   People do things when they find it in their best interest to do them. We think, “I’ll do (or not to do) [action] because if I do (or don’t) [result] will happen.” If the potential result is a negative impetus imposed by another, we might say the law has teeth.

   But giving teeth is not the only way to motivate. The idea is simply to provide enough of a reason for others to comply, without causing a revolt. If too much force is in place as motivator (Do what the dictator says or die!) the regime might not last long, as the oppressed majority will eventually rise up and fight.

   The best motivators are those that come naturally – when individuals see that a specific action provides a specific result. For example, I can make a family rule that if my boys climb the bookshelves (which they do regularly) then they’ll be punished or lose a privilege. That might work, unless they think the privilege of getting what’s on the shelves is more worth the punishment or better than the thing they’re going for. However, once they fall and get hurt – a natural consequence of a dangerous act, they’re much less likely to do it again.

   For some actions, there’s no immediate natural consequence. In these cases, we try to design some logical consequence that fits the behavior we’re trying to encourage/discourage. This can be much more difficult for society than in a family, as we don’t adjust as quickly when unintended incentives creep in. In other words, we try to create incentives for individuals to act in a certain way, but the laws frequently backfire because the actual incentives become different than what we had anticipated.

   Many wealth redistribution programs run into this problem. They are almost always put in place to help those who can’t do for themselves what most can. The problem is that programs designed to help more often hurt by creating huge incentives for people to engage in self-debasing behaviors (such as working less) so that they can qualify for the dole.

   Consider this simple example. If students at a high school are given grades commensurate with their performance on assignments and tests, and future goals of jobs and/or college are in part dependent on their grades, an incentive to study and work hard is built in. Now lets say that a teacher, in order to be “fair”, takes some points off of the hardest working students’ scores to give them to the lowest performers – we’ll call it redistribution of points. That, the teacher believes, will help those that struggle the most. What happens instead – those getting the free points are even less motivated than before, since they get a decent result without much effort. Those that had been the top performers have less incentive to work hard, since some of their expected reward is removed.

   It’s a simplistic model, but academic and economic studies have documented that when financial resources are shifted from the top to the bottom, similar shifts in behavior occur. Those at the top still work hard, but not as hard as they otherwise would have, as the potential reward is lessened. Those at the bottom are given little, if any, motivation to do well, as they’ll get theirs either way.

   I guess I’ve redirected this thread a bit. I guess what I’m trying to get at is that whenever parents or governments impose punishments/consequences/rewards, it’s extremely important that extreme attention is paid to potential incentives that are created, lest our best intentioned efforts lead to unforeseen results.

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2. 

   David

   2007-05-01

   Sometimes there are other unintended consequences as well. Rental assistance programs would seem to be working when people have places to live even when they have little to live on, but the artificially imposed price limits in the law can be used by clever landlords as a target. The law says that rental assistance will not exceed a certain level and a landlord conveniently charges nothing below that level – they then make sure to accept rental assistance renters and meet the minimum requirements for living standards and they are assured (by market forces) that they will never have a vacancy because there are always renters looking for housing where their rental assistance will be accepted.

   Besides having very high occupancy rates, the landlords also have a very secure income because they are not dependent on the income of their renters. They collect their rent from Uncle Sam. In other words, there are lots of ways to game the system when the system is based on rules rather than actual charity (the feeling of love for fellow man, not the self-righteous “I’m so good I even help the poor.”)

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