<story><title>How Do You Stop Sea Captains From Killing Their Passengers?</title><url>http://www.npr.org/blogs/money/2010/09/09/129757852/pop-quiz-how-do-you-stop-sea-captains-from-killing-their-passengers</url></story><parent_chain></parent_chain><comment><author>randomwalker</author><text>It is easy to underestimate the difficulty of creating the right incentives.&lt;p&gt;&lt;i&gt;In the 1940’s, the paleontologist von Koenigswald was searching for early human remains on Java and decided to enlist the help of the locals in his search by offering them “ten cents for every piece of hominid bone they could come up with.” Unfortunately for von Koenigswald (and for his findings), he discovered too late that the locals “had been enthusiastically smashing large pieces into small ones to maximize their income.”&lt;/i&gt;&lt;p&gt;From &lt;a href=&quot;http://freakonomics.blogs.nytimes.com/2009/10/20/when-youre-paying-per-bone-fragment-expect-more-fragments/&quot; rel=&quot;nofollow&quot;&gt;http://freakonomics.blogs.nytimes.com/2009/10/20/when-youre-...&lt;/a&gt;&lt;p&gt;(The story is from the book &lt;i&gt;A Short History of Nearly Everything&lt;/i&gt;, which is one of the best books I&apos;ve ever read. The amazing thing about the book is that it is in fact a short history of nearly everything.)&lt;p&gt;Combine the difficulty of getting incentives right with the inherent problems of Government and a dangerous mix results. For example, every time a subsidy is created, a special-interest group sprouts up dedicated to preserving the subsidy in perpetuity, long after it has outlived its utility.</text></comment>
<story><title>How Do You Stop Sea Captains From Killing Their Passengers?</title><url>http://www.npr.org/blogs/money/2010/09/09/129757852/pop-quiz-how-do-you-stop-sea-captains-from-killing-their-passengers</url></story><parent_chain></parent_chain><comment><author>jacoblyles</author><text>It&apos;s interesting that they tried the tactic of micro-regulating every aspect of the ship captain&apos;s business and that didn&apos;t work as well as broad incentives.&lt;p&gt;Today, this micro-regulation is politically popular as voters can more easily comprehend the direct effects of regulation as opposed to the indirect effects of broad incentives. For example, we force drug companies to perform very extensive clinical trials for new drugs and this makes us feel safe. But simply increasing the liability drug companies face for producing harmful drugs may be more effective and would certainly be a lot cheaper (as much as 90% of the cost of a new drug is meeting FDA requirements). But I doubt voters would feel as safe in a regime of broad incentives even if it worked better.</text></comment>