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Salemicus comments on Political ideas meant to provoke thought - Less Wrong
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There is a rich literature, normally referred to as "public choice", which looks at the incentives facing government officials. There's far too much to describe in a short reply, but the Wikipedia article is a good starting point: http://en.wikipedia.org/wiki/Public_choice
If you employ someone to work on problem X, under what circumstances does that person have an incentive to tell you that ...
For instance, if you employ a Witchfinder General, whose job it is to locate witches and prosecute them for laying curses that sicken their neighbors' cattle, that person may resist coming to the realization that cattle get sick due to pathogens, not curses ....
Fortunately, bureaucrats are part of a wider ecosystem including opposition politicians and journalists, both of whichparties are well motivated to seek out waste and ineffectiveness.