Tuesday, January 22, 2008

Good intentions, Bad outcomes

Most people judge policy with intentions rather than outcomes.

So Samurdhi (the Sri Lankan hand-out scheme) is good because it's designed to give money to the poor, never mind the fact that the beneficiaries are partisans of the ruling party and it doesn't have the faintest of hope of eradicating poverty, fertilizer subsidies are considered good because it's stated aim to help the farmer, never mind the fact that most never actually receive the subsidies and distorts the market signals which clearly urge them to go into a more profitable venture. The list goes on.

Steven Levitt and Dubner, the Authors of the infamous Freakonomics, examines the law of Unintended consequences in the New York Times Magazine. a preview note from the Freakonomics blog is here.

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