Incentives can be defined quite simply as motivating influences. They are vital components in understanding human behavior.
People act in order to benefit themselves. Giving people more reason to do something will make people perform an action more often.
Rewards are a common type of incentive. I am much more likely to buy ice cream or cookies or orange juice or anything if the item is on sale. I am more likely to enter an essay contest if I know that the winner receives $10,000 rather than $500.
Punishments are also a type of “negative incentive.” I am much less likely to drink on a college campus if I know suspension would result if I were caught. A child is less inclined to misbehave if he knows that his parents will take away a privilege (such as TV) in response to his misbehavior.
Just as businesses and individuals offer incentives to promote or discourage certain behaviors, so too does the government.
For example, tax breaks for businesses that promote so-called “green” technologies encourage companies to fund “environmentally friendly” projects are examples of positive incentives. Similarly, fines for littering on the highway or for speeding are examples of negative incentives – the government aims to stop behavior it frowns upon by punishing such behavior severely.
Many of these incentives are helpful. Tax breaks for newly founded small businesses encourage economic growth. Fines for running red lights increase road safety.
However, government often offers incentives that end up encouraging harmful behaviors.
Sexual education programs in public schools are a prime example of this phenomenon. By educating children how to practice “safe sex” in the public schools, the government actively promotes morally harmful behavior.
Government funding for programs that protect people from the consequences of foolish behavior is counterproductive and wasteful of taxpayer dollars. But even more fundamentally, these types of programs perpetuate harmful behaviors in society.