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Strings Attached

Strings Attached: Untangling the Ethics of Incentives

Ruth W. Grant
Copyright Date: 2011
Pages: 200
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  • Book Info
    Strings Attached
    Book Description:

    Incentives can be found everywhere--in schools, businesses, factories, and government--influencing people's choices about almost everything, from financial decisions and tobacco use to exercise and child rearing. So long as people have a choice, incentives seem innocuous. ButStrings Attacheddemonstrates that when incentives are viewed as a kind of power rather than as a form of exchange, many ethical questions arise: How do incentives affect character and institutional culture? Can incentives be manipulative or exploitative, even if people are free to refuse them? What are the responsibilities of the powerful in using incentives? Ruth Grant shows that, like all other forms of power, incentives can be subject to abuse, and she identifies their legitimate and illegitimate uses.

    Grant offers a history of the growth of incentives in early twentieth-century America, identifies standards for judging incentives, and examines incentives in four areas--plea bargaining, recruiting medical research subjects, International Monetary Fund loan conditions, and motivating students. In every case, the analysis of incentives in terms of power yields strikingly different and more complex judgments than an analysis that views incentives as trades, in which the desired behavior is freely exchanged for the incentives offered.

    Challenging the role and function of incentives in a democracy,Strings Attachedquestions whether the penchant for constant incentivizing undermines active, autonomous citizenship. Readers of this book are sure to view the ethics of incentives in a new light.

    eISBN: 978-1-4008-3974-2
    Subjects: Business, Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-xiv)
  4. Acknowledgments
    (pp. xv-xviii)
  5. Chapter ONE Why Worry about Incentives?
    (pp. 1-13)

    Express traffic lanes are set aside during rush hour for cars with more than two passengers. A will stipulates that a daughter will inherit only if she agrees to be a stay-at-home mom. West Virginia pays married couples on welfare an extra $100 per month, funded by a federal program to promote marriage. The government authorizes tax deductions for charitable contributions. Companies pay schools to install soda machines or televisions in their lunchrooms. Schools pay students when they get good grades. A prominent economist suggests that the government tax calories in order to reduce obesity. Legislators in South Carolina discuss...

  6. Chapter TWO Incentives Then and Now The Clock and the Engineer
    (pp. 14-30)

    Why begin with history? What can be learned from the story of the origins of “incentives talk”? In this case, the historical story is illuminating because it challenges contemporary misconceptions (1) that incentives are identical to market mechanisms; (2) that they are, therefore, alternatives to social and political control; and (3) that they have always been largely uncontroversial. Assuming these propositions are true, it is no wonder that incentives tend to get an ethical “pass” and are accepted without a great deal of scrutiny. But none of these notions could be further from the truth. On the contrary, the history...

  7. Chapter THREE “Incentives Talk”: What Are Incentives Anyway?
    (pp. 31-44)

    What are incentives? This obvious initial question turns out to be quite a bit more difficult to answer than one might expect. The term has a variety of meanings and usages, some in ordinary language and some in the technical vocabulary of academic disciplines such as psychology and economics. Most important, “incentive” is used so widely and indiscriminately today that the boundaries of the concept are blurred. It is used to refer to virtually every kind of motivation at the same time that it is used to refer to virtually every kind of exchange or choice situation. Consequently, important distinctions...

  8. Chapter FOUR Ethical and Not So Ethical Incentives
    (pp. 45-59)

    How can one person get another person to do what she wants him to do? The classic alternatives are force and persuasion: I can make you do what I want you to do or I can convince you to want to do what I want you to do. But I can also give you something that you want in exchange for your compliance with what I want. This is bargaining (of which incentives are a type), and it is one more form of power, along with coercion and persuasion. Each form of power is sometimes legitimate and sometimes not. Examining...

  9. Chapter FIVE Applying Standards, Making Judgments
    (pp. 60-74)

    How can we determine whether any particular use of incentives is ethical? I have been arguing that these judgments can be made best when incentives are understood as a form of power and evaluated accordingly. The ethical issues are more readily apparent when incentives are understood in this way, and standards of legitimacy can be clearly identified that apply to all forms of power: legitimacy of purpose, voluntariness, and effect on character.

    Articulating these criteria allows us to identify what sorts of questions need to be asked in judging incentives. The federal government, aiming to decrease traffic deaths, gives highway...

  10. Chapter SIX Getting Down to Cases
    (pp. 75-122)

    Generally speaking, I have argued that incentives have not been controversial enough. But there are some areas where the question of the ethics of incentives has been controversial indeed. I take up four such controversies in this chapter to illustrate the sort of analysis that is required to distinguish legitimate from illegitimate incentives: plea bargaining, payment to recruit human subjects for medical research, conditions attached to loans by the International Monetary Fund, and incentives used to motivate children to learn.

    These cases have some features in common, but I have deliberately chosen them from very different domains. Different areas of...

  11. Chapter SEVEN Beyond Voluntariness
    (pp. 123-132)

    As we have seen, examining the particulars of incentive programs in some detail in order to evaluate their legitimacy raises a host of complex questions. Often, however, discussions of the ethics of incentives hang the question solely on whether the response to the offer is voluntary. But voluntariness alone is inadequate as a standard for judging the complex issues involved in most cases. Where does the focus on voluntariness come from, and what are its limits?

    A major source of the emphasis on “voluntariness” comes from the approach to incentives in contemporary economics. Incentives are considered trades and trades are...

  12. Chapter EIGHT A Different Kind of Conversation
    (pp. 133-140)

    Incentives are an attractive tool for public policy and private management for two basic reasons. First, they seem to enhance freedom because they preserve choice and are an alternative to coercion. Second, they offer the promise of an easy solution, a “quick fix”: if you can get the price right, an incentive ought to produce predictable changes in behavior immediately.

    But incentives are deceptive. We have seen that there are many situations in which incentives do not produce predictable results—quite the contrary. Incentives can be counterproductive; sometimes they backfire. Moreover, attaching strings does not always make the puppet dance,...

  13. Notes
    (pp. 141-170)
  14. References
    (pp. 171-188)
  15. Index
    (pp. 189-202)