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However, it may cause incentive distorting because of abuse of power at the central level (Baker et al. 2002).
Diversity of authority and accountability will cause incentive distorting even in a "big government" like China, if only by some so-called objective indexes and ranks.
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We posit that an aversion to being exploited, i.e., being used instrumentally for another's benefit, can also cause incentives to fail.
At times, activities unrelated to the issue of concern can cause incentives.
Nor was there evidence to suggest that "tax rates on personal incomes cause major incentive problems".
But both problems share a root cause: the incentives that guide businesses' employment practices.
However, health insurance and sick leave pay cause consumer incentives to be reflected in moral hazard effects of several types.
The system of central per-capita grants helped support the units, despite the worrying side-effect of causing an incentive to keep as many men on the books as possible regardless of fitness, but even so it was becoming apparent that many Volunteer Corps were headed towards financial collapse unless some action were taken.
Feasibility considers whether the indicators can, in fact, be implemented from the data sources available, whether the results could be interpreted in respect of quality of care and whether they might cause perverse incentives.
As much as two-thirds of the extra damage, the researchers say, will be caused by incentives to develop in risky areas.
A joint receiver and restructuring services partner at Deloitte, Neville Kahn, added: "The senior lenders were reluctant to appoint a receiver but felt they had no choice due to the ongoing defaults, which have remained uncured for over five years, and concerns that the borrowers' lack of equity in the transaction had caused their incentives to become misaligned with the lenders'".
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