Incentives influence human behaviour

So why don’t policymakers accept it?  In the case of the US financial meltdown of 2009 the government intervened to encourage financial institutions to lend to high risk borrowers.  It was always destined to end in tears.  But combined with the greed of the financial institutions and wrong government policy incentives it created the circumstances for a global financial meltdown.

There are lessons to be learned about policy incentives. In particular welfare reform and healthcare.


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