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Showing posts with label incentives. Show all posts
Showing posts with label incentives. Show all posts

Friday, January 20, 2012

Peter Saunders: Nudge, nudge, here come the Germans

Okay, forget, for a moment the monumental folly of the European common currency, which wasn’t really the Germans’ fault. It was pressed on them by Mitterand as the price for French agreement to reunification. Consider, instead, German social policy. We might all learn something from the way the Germans tackle problems that the Brits (and to some extent the Aussies) struggle with. 

Consider, for example, family policy, and the child support rules for absent fathers. The German civil code establishes a principle called the ‘solidarity of the generations.’ This stipulates that ‘lineal relatives’ (children, parents and grandparents) have a legal obligation to maintain each other. The primary obligation to support dependent children falls on parents, but if they lack the means or will to pay, grandparents become liable. While our politicians voice platitudes about strengthening family life, the Germans give extended families real duties. Before taxpayers are asked to contribute to the costs of maintaining other people’s children, German law insists that the extended family should draw on its own resources.

Friday, December 2, 2011

Oliver Marc Hartwich: Incentives are life and death

If there was one word to sum up the whole body of economic theory, it would have to be ‘incentives.’ People act on incentives. As William Stanley Jevons (1835–82), one of the founding fathers of neoclassical economics, put it, the whole economy is ‘a calculus of pleasure and pain.’

Greece is playing out a most macabre application of incentives. Greece may be the madhouse of the world economy, but there is method in its madness. According to a report in The Lancet, the number of HIV infections in Greece has skyrocketed. The increase was partly due to the termination of drug rehabilitation and street-work programs as a result of government austerity measures. But there was a more chilling explanation.