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    What an incentive

    Fatih Özatay, PhD14 May 2011 - Okunma Sayısı: 1086

    You have to do all it takes to change the status quo. Evidently, this cannot be done by employing disincentive mechanisms.

    There is a close relationship between individuals' behaviors and the way they are incentivized. This is such an important relationship in economic theory. On the other hand, it is clear that the word "incentive" (stands for 'özendirmek' in Turkish) does not always have a positive meaning; for instance, one bad friend can encourage his fellow to start smoking. This is the case also with the economics.

    For instance, if you have an ill-functioning judiciary, courts cannot make the party who violated a contract fulfill his/her obligations, even through the contract defines the exact procedure to be followed in the case of a violation. This gap, then, is closed "practically". For example, 'fellows that shoot at the feet' step in. Therefore, such (weak) institutional structure encourages the flourishing of the mafia.

    This is the case also with the bureaucracy
    Such incentive can also be seen within the bureaucracy. I do not remember the picture fully as I have left the bureaucracy a long time ago. But I remember this "motto": "Anyone who serves the state shall definitely be punished." That motto successfully tells us why protecting the status quo becomes the most common type of behavior: "Who on earth would make effort to change things in this milieu..."

    Again an example from the bureaucracy; but this time a less sophisticated, a really primitive one: let's say there is a state unit which carries out hundreds of operations in a given period of time. You sensed a small mistake in one of these operations. It is doubtful whether the operation was actually erroneous. What is more, there already are other units who made mistakes much frequently. But your problem is with that specific unit who made a so-called mistake that "somehow" you consider a real mistake: you want that unit become as messy as your unit.

    What will you do, then? You will set a team of staff that will bring the "so-called" mistake into light.  If the "staff" cannot identify any mistake, you will force another member of the staff to find one. But how can you expect the unit under observation make any contribution after that point? What will you "incentivize" them for? The common behavior code of the unit will most probably become "projecting or manipulating the status quo". In other words, a mechanism which incentivizes the behavior of keeping the noses clean will step in.

    Let me tell you which "status quo" I am talking about: compared to developed countries, per capita income in Turkey underwent no progress since 1980s. This is the status quo. If you are content with this, there is nothing to say. But if you are not content, which does not require any lambency, you have to do all it takes to change the status quo. Evidently, this cannot be done by employing disincentive mechanisms. For those who understand what I mean...

    I want to focus on this encouragement issue on Saturdays. Following from here, I will try to touch upon some issues about the course of events in the academic life.

     

    This commentary was published in Radikal daily on 14.05.2011

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