Thursday, May 24, 2007

Perverse incentives: no wonder Osama hasn't been caught

Crooks and Liars:
NBC's Jim Miklaszewski reports on how the Bush administration pays the Pakistani government $1 billion a year to hunt down Osama bin Laden, and demands zero accountability as to how that money is spent.
I like Slacktivist's analogies:

Imagine this happens to you:

Some big Manhattan publisher gives you a $100,000 advance to write the Great American Novel. Then you look at the fine print and you realize that your deal gives you $100,000 every year until you finish the book.

You call to double check. "Does this mean I get $100,000/year forever?" you ask.

"Not forever," the publisher says, "just until whenever you're finished writing." And once the book is completed, the publisher says, you will receive a $2,500 bonus.


Let's try one more analogy. Imagine you're Halliburton. You've been hired by the U.S. government to rebuild Iraq's refineries and oil infrastructure. In the meantime, until that job is completed, you've also been hired to supply Iraq with gasoline at whatever prices you see fit to charge. So, do you diligently work to complete the first task, thus killing the goose that lays the golden egg? Or do you do the economically sensible thing and ensure that the lucrative "meantime" lasts as long as possible?

This analogy, unfortunately, is not hypothetical.


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