Incentive Design and the Law of Unintended Consequences
I ncentive Design and the Law of Unintended Consequences 🕒 3 min read A Special Collaboration with Desiree Grace, River Heights Consulting Andrea Belk Olson, Pragmadik In 1958, Mao Zedong launched the Great Leap Forward, a five-year push to turn China from an agrarian society into an industrial power. One piece of the plan was the Four Pests Campaign: wipe out flies, mosquitoes, rats, and sparrows. The sparrows made the list because they ate grain meant for people. The entire country was mobilized against the birds. And it worked. Within a few years, sparrows were nearly gone. Then the locusts came. Sparrows ate some grain, but mostly they ate insects. With no predator left, locusts tore through the crops. Mao reportedly imported sparrows from the Soviet Union to undo the damage, but it was too late. Tens of millions of people died in one of the worst famines in history. Nobody set out to cause a famine. The goal made sense on paper. That's exactly the problem. Good intentions don...