One of the fundamental principles used by economists to understand the world is that people respond to incentives. Good incentives push people to do things that are beneficial to society, while bad incentives have the opposite effect.
“The perils of high-powered incentives”, a 2018 paper by a team of researchers including Daron Acemoglu, James Robinson et al, in the National Bureau of Economic Research , takes the case of how bad incentives can lead to some very brutal consequences. In the paper, the authors first elaborate on how cash and other perks have historically been offered as incentives to members of various militaries across the world to deal with enemy forces. Then they look at the particular case of Colombia’s anti-insurgency strategy against the leftist guerrillas after the election of Alvaro Uribe as the country’s President in 2002. The new government offered a variety of incentives to its soldiers in order to prod them to kill and maim as many enemy forces as possible. One of the incentives, a soldier said, was that Colombian military personnel could earn as much as 15 days of vacation by killing guerrillas. Promotions and other perks offered to colonels also depended on the number of killings carried out by their soldiers.
While the stated goal of the government’s incentive scheme was to deal with the guerrillas, the authors find that it also pushed soldiers to engage in fake killings of innocent civilians just to claim their incentives. This was particularly the case in regions where there were fewer judicial checks on errant soldiers. Colombia’s military clearly did not have any monetary or other material incentives to care about the human rights of civilians, so it was no surprise that they killed innocent people. The more relevant question to ask is why the government failed to strengthen institutions meant to keep a check on soldiers. It may be that the government itself, for whatever reason, had no material incentive to tackle the unintended effects of its policy on ordinary civilians. The authors thus discourage the use of high-powered incentives in countries with weak institutions.
