Public agencies often create incentive structures aimed at increasing productivity and value, and serving the public interest. These structures can be built into supplier and employment contracts, policies, regulations and business rules. But they don’t always go according to plan.

A perverse incentive is an incentive that produces unforeseen and unwelcome results. Sometimes perverse incentives can inspire outcomes that are completely at odds with the intended purpose of an activity or program.

Integrity Spotlight: Perverse incentives outlines how incentive schemes might be manipulated to provide opportunities for corruption to flourish and how best to avoid this.