1. Gwyn Bevan and Christopher Hood, “What’s Measured Is What Matters: Targets and Gaming in the English Public Health System,” Public Administration 84, no. 3 (2006), pp. 517–53.
2. Paula Chatterjee and Karen E. Joynt, “Do Cardiology Quality Measures Actually Improve Patient Outcomes?” Journal of the American Heart Association (February 2014). The same problem was noted some years earlier by Richard Rothstein, “The Influence of Scholarship and Experience in Other Fields on Teacher Compensation Reform,” pp. 87–110 in Matthew G. Springer (ed.), Performance Incentives: Their Growing Impact on American K-12 Education (Washington, D.C., 2009), p. 96; an expanded version was published as Holding Accountability to Account: How Scholarship and Experience in Other Fields Inform Exploration of Performance Incentives in Education, National Center on Performance Incentives, Working Paper 2008–04, February 2008.
3. Bevan and Hood, “What’s Measured Is What Matters.”
4. An exception is Richard Rothstein, Holding Accountability to Account. Also valuable is Adrian Perry, “Performance Indicators: ‘Measure for Measure’ or ‘A Comedy of Errors’?” in Caroline Mager, Peter Robinson, et al. (eds.), The New Learning Market (London, 2000).
5. Laura Landro, “The Secret to Fighting Infections: Dr. Peter Pronovost Says It Isn’t That Hard. If Only Hospitals Would Do It,” Wall Street Journal, March 28, 2011, and Atul Gawande, The Checklist Manifesto (New York, 2009).
6. Michael Lewis, Moneyball: The Art of Winning an Unfair Game (New York, 2003).
7. Chris Lorenz, “If You’re So Smart, Why Are You under Surveillance? Universities, Neoliberalism, and New Public Management,” Critical Inquiry (Spring 2012), pp. 599–29, esp. pp. 610–11.
8. Jonathan Haidt, The Righteous Mind (New York, 2012), p. 34 and passim.
9. On the Spellings Commission report, see Fredrik deBoer, Standardized Assessments of College Learning Past and Future (Washington, D.C.: New American Foundation, March 2016).
10. Jerry Z. Muller, The Mind and the Market: Capitalism in Modern European Thought (New York, 2002) and my Teaching Company lecture course, “Thinking about Capitalism.” See also Robert K. Merton, “The Unanticipated Consequences of Purposive Social Action,” American Sociological Review 1 (December 1936), pp. 894–904; and Merton, “Unanticipated Consequences and Kindred Sociological Ideas: A Personal Gloss,” in Carlo Mongardini and Simonetta Tabboni (eds.), Robert K. Merton and Contemporary Sociology (New Brunswick, N.J., 1998), pp. 295–318; Robert K. Merton and Elinor Barber, The Travels and Adventures of Serendipity (Princeton, 2004).
11. As Alfie Kohn notes, “[J]ust as social psychologists were starting to recognize how counterproductive extrinsic motivators can be, this message was disappearing from publications in the field of management.” Kohn, Punished by Rewards (New York, 1999), p. 121.
CHAPTER 1. THE ARGUMENT IN A NUTSHELL
1. A term used by Bruce G. Charlton, “Audit, Accountability, Quality and All That: The Growth of Managerial Technologies in UK Universities,” in Stephen Prickett and Patricia Erskine-Hill (ed.), Eduation! Education! Education! Managerial Ethics and the Law of Unintended Consequences (Thorverton, England, 2002).
2. Fabrizio Ferraro, Jeffrey Pfeffer, and Robert L. Sutton, “Economics Language and Assumptions: How Theories Can Become Self-Fulfilling,” Academy of Management Review 30, no. 1 (2005), pp. 8–24.
3. Tom Peters, “What Gets Measured Gets Done,” (1986), http://tompeters.com/columns/what-gets-measured-gets-done/.
4. I owe the latter formulation to Professor Paul Collier.
5. Charlton, “Audit, Accountability, Quality and All That,” pp. 18–22.
6. Useful attempts to summarize these negative consequences include Colin Talbot, “Performance Management,” pp. 491–517 in Ewan Ferlie, Laurence E. Lynn, Jr., and Christopher Pollitt (eds.), The Oxford Handbook of Public Management (New York, 2005), pp. 502–4; and Michael Power, “The Theory of the Audit Explosion,” pp. 326–44, in the same volume, see esp. p. 335.
7. William Bruce Cameron, Informal Sociology: A Casual Introduction to Sociological Thinking (New York, 1963).
8. Bevan and Hood, “What’s Measured Is What Matters.”
9. Quoted in Diane Ravitch, The Death and Life of the Great American School System (New York, 2010), p. 160. See also Chris Shore, “Audit Culture and Illiberal Governance: Universities and the Culture of Accountability,” Anthropological Theory 8, no. 3 (2008), pp. 278–99; Mary Strathern (ed.), Audit Cultures: Anthropological Studies in Accountability, Ethics and the Academy (London, 2000).
10. Alison Wolf, Does Education Matter? Myths about Education and Economic Growth (London, 2002), p. 246. C.A.E. Goodhart, “Problems of Monetary Management: The UK Experience” (1975), pp. 91–121 in Goodhart, Monetary Theory and Practice (London, 1984).
CHAPTER 2. RECURRING FLAWS
1. Kurt C. Strange and Robert L. Ferrer, “The Paradox of Family Care,” Annals of Family Medicine 7, no. 4 (July/August 2009), pp. 293–99, esp. p. 295.
2. Sally Engle Merry, The Seductions of Quantification: Measuring Human Rights, Gender Violence, and Sex Trafficking (Chicago, 2016), pp. 1–33.
3. Ibid., p. 1.
4. Kevin E. Davis, Benedict Kingsbury, and Sally Engle Merry, “Introduction: Global Governance by Indicators,” in Kevin Davis, Angelina Fisher, Benedict Kingsbury, and Sally Engle Merry (eds.), Governance by Indicators: Global Power through Quantification and Rankings (New York, 2012), pp. 9, 18.
CHAPTER 3. THE ORIGINS OF MEASURING AND PAYING FOR PERFORMANCE
1. Quoted in Matthew Arnold, “The Twice-Revised Code” (1862), in R. H. Super (ed.), The Complete Prose Works of Matthew Arnold (Ann Arbor, Mich., 1960–77), vol. 2, pp. 214–15.
2. Park Honan, Matthew Arnold: A Life (Cambridge, Mass., 1983), pp. 318–19; R. H. Super’s notes to Arnold, “The Twice-Revised Code,” in Complete Prose Works, vol. 2, p. 349.
3. Arnold, “The Twice-Revised Code,” pp. 223–24.
4. Ibid., p. 226.
5. Ibid., p. 243.
6. Fred G. Walcott, The Origins of Culture and Anarchy: Matthew Arnold and Popular Education in England (Toronto, 1970), pp. 7–8.
7. Arnold, “Special Report on Certain Points Connected with Elementary Education in Germany, Switzerland, and France” (1886), in Complete Prose Works, vol. 11, pp. 1, 28.
8. Simon Patten, “An Economic Measure of School Efficiency,” Educational Review 41 (May 1911), pp. 467–69, quoted in Raymond E. Callahan, Education and the Cult of Efficiency (Chicago, 1962), p. 48.
9. Frederick W. Taylor, The Principles of Scientific Management (New York, 1911). On Taylor and his influence on education reform advocates see Callahan, Education and the Cult of Efficiency, chap. 2.
10. Alfred D. Chandler, Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977), pp. 275–76.
11. Taylor, quoted in James C. Scott, Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (New Haven, 1998), p. 336.
12. Frederick W. Taylor, Principles of Scientific Management, cited by David Montgomery, The Fall of the House of Labor (New Haven, 1989), p. 229.
13. Ellwood P. Cubberley, Public School Administration (Boston, 1916), on which see Callahan, Education and the Cult of Efficiency, pp. 95–99.
14. Dana Goldstein, The Teacher Wars: A History of America’s Most Embattled Profession (New York, 2014), pp. 86–87.
15. For the term “student growth,” see Chad Aldeman, “The Teacher Evaluation Revamp, in Hindsight,” EducationNext 17, no. 2 (Spring 2017), http://educationnext.org/the-teacher-evaluation-revamp-in-hindsight-obama-administration-reform/.
16. Richard Sennett, The Corrosion of Character: The Personal Consequences of Work in the New Capitalism (New York, 1998), p. 42.
17. Rakesh Khurana, From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession (Princeton, 2007), p. 295.
18. Richard R. Locke and J.-C. Spender, Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives out of Balance (London, 2011), p. xiii.
19. Adrian Wooldridge, Masters of Management (New York, 2011), p. 3.
20. Bob Lutz, Car Guys vs. Bean Counters: The Battle for the Soul of American Business (New York, 2013).
21. Christopher Pollitt, “Towards a New World: Some Inconvenient Truths for Anglosphere Public Administration,” International Review of Administrative Sciences 81, no. 1 (2015), pp. 3–17, esp. pp. 4–5; John Quiggin, “Bad Company: Correspondence,” Quarterlyessay.com, https://www.quarterlyessay.com.au/correspondence/1203; similarly Henry Mintzberg, “Managing Government, Governing Management,” Harvard Business Review, May–June 1996, pp. 75–83.
22. David Halberstam, The Best and the Brightest (New York, 1972), pp. 213–65.
23. Kenneth Cukier and Viktor Mayer-Schönberger, “The Dictatorship of Data,” MIT Technology Review, May 31, 2013.
24. Edward N. Luttwak, The Pentagon and the Art of War (New York, 1984), p. 269.
25. Luttwak, The Pentagon and the Art of War, pp. 30–31. On the misuse of the metric of body counts, see the memoirs and scholarly literature analyzed in Ben Connable, Embracing the Fog of War: Assessment and Metrics in Counterinsurgency (Rand Corporation, 2012), pp. 106ff.
26. Luttwak, The Pentagon and the Art of War, pp. 138–43.
27. Ibid., p. 152.
28. Matthew Stewart, The Management Myth: Why the Experts Keep Getting It Wrong (New York, 2009), p. 31.
29. Theodore M. Porter, Trust in Numbers: The Pursuit of Objectivity in Science and Public Life (Princeton, 1995), p. ix.
CHAPTER 4. WHY METRICS BECAME SO POPULAR
1. Ralf Dahrendorf, The Modern Social Conflict: An Essay on the Politics of Liberty (Berkeley, 1988), p. 53.
2. Porter, Trust in Numbers, p. ix.
3. Stefan Collini, “Against Prodspeak,” in Collini, English Pasts: Essays in History and Culture (Oxford, 1999), p. 239.
4. Philip K. Howard, The Rule of Nobody: Saving America from Dead Laws and Broken Government (New York, 2014), p. 44.
5. Philip K. Howard, The Death of Common Sense: How Law Is Suffocating America (New York, 1994), pp. 12, 27.
6. Howard, The Rule of Nobody, p. 54.
7. Lawrence M. Freedman, “The Litigation Revolution,” in Michael Grossman and Christopher Tomlins (eds.), The Cambridge History of Law in America: Vol. III The Twentieth Century and After (Cambridge, 2008), p. 176.
8. Ibid., p. 187.
9. Ibid., p. 188–89.
10. Mark Schlesinger, “On Values and Democratic Policy Making: The Deceptively Fragile Consensus around Market-Oriented Medical Care,” Journal of Health Politics, Policy and Law 27, no. 6 (December 2002), pp. 889–925; and Mark Schlesinger, “Choice Cuts: Parsing Policymakers’ Pursuit of Patient Empowerment from an Individual Perspective,” Health, Economics, Policy and the Law 5 (2010), pp. 365–87.
11. James Heilbrun, “Baumol’s Cost Disease,” in Ruth Towse (ed.), A Handbook of Cultural Economics, 2nd ed. (Cheltenham, England, 2011); and William G. Bowen, “Costs and Productivity in Higher Education,” The Tanner Lectures, Stanford University, October 2012, pp. 3–4.
12. Bowen, “Costs and Productivity in Higher Education,” p. 5, citing Teresa A. Sullivan et al. (eds.), Improving Measurement of Productivity in Higher Education (Washington, D.C., 2012).
13. Yves Morieux and Peter Tollman, Six Simple Rules: How to Manage Complexity Without Getting Complicated (Boston, 2014), p. 6.
14. Rakesh Khurana, Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs (Princeton, 2002), esp. chap. 3. The phenomenon is by no means confined to the corporate sector.
15. Steven Levy, “A Spreadsheet Way of Knowledge,” Harper’s, November 1984, now online at https://medium.com/backchannel/a-spreadsheet-way-of-knowledge-8de60af7146e.
16. Seth Klarman, A Margin of Safety: Risk-Averse Value Investing for the Thoughtful Investor (New York, 1991).
CHAPTER 5. PRINCIPALS, AGENTS, AND MOTIVATION
1. Michael Jensen and William H. Meckling, “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure,” Journal of Financial Economics 3, no. 4 (1976), pp. 305–60; Bengt Holmström and Paul Milgrom, “Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design,” Journal of Law, Economics, & Organization [Special Issue: Papers from the Conference on the New Science of Organization, January 1991] 7 (1991), pp. 24–52; Charles Wheelan, Naked Economics, rev. ed. (New York, 2010), pp. 39–43.
2. Khurana, From Higher Aims to Hired Hands, pp. 317–26. Similarly, Richard Münch, Globale Eliten, lokale Autoritäten (Frankfurt, 2009), p. 75. Also instructive is Ferraro, Pfeffer, Sutton, “Economics Language and Assumptions.”
3. Theodore M. Porter, Trust in Numbers: The Pursuit of Objectivity in Science and Public Life (Princeton, 1995), p. ix.
4. Talbot, “Performance Management,” p. 497.
5. David Chinitz and Victor G. Rodwin, “What Passes and Fails as Health Policy and Management,” Journal of Health Politics, Policy, and Law 39, no. 5 (October 2014), pp. 1113–26, esp. pp. 1114–17.
6. Mintzberg, “Managing Government, Governing Management,” pp. 75–83; and Holmström and Milgrom, “Multitask Principal-Agent Analyses.”
7. Hal K. Rainey and Young Han Chun, “Public and Private Management Compared,” in Ewan Ferlie, Laurence E. Lynn, Jr., and Christopher Pollitt (eds.), The Oxford Handbook of Public Management (New York, 2005), pp. 72–102, 85; and James Q. Wilson, Bureaucracy: What Government Agencies Do and Why They Do It (New York, 2000), pp. 156–57.
8. Roland Bénabout and Jean Tirole, “Intrinsic and Extrinsic Motivation,” Review of Economic Studies no. 70 (2003), pp. 489–520. A pioneering work of intrinsic motivation theory was Edward L. Deci, Intrinsic Motivation (New York, 1975). Other studies by psychologists include Thane S. Pittman, Jolee Emery, and Ann K. Boggiano, “Intrinsic and Extrinsic Motivational Orientations: Reward-Induced Changes in Preference for Complexity,” Journal of Personality and Social Psychology 42, no. 5 (1982), pp. 789–97; and T. S. Pittman, A. K. Boggiano, and D. N. Ruble, “Intrinsic and Extrinsic Motivational Orientations: Limiting Conditions on the Undermining and Enhancing Effects of Reward on Intrinsic Motivation,” in J. Levine and M. Wang (eds.), Teacher and Student Perceptions: Implications for Learning (Hillsdale, N.J., 1983). An important figure in the transition of the theory from psychology to economics is Bruno S. Frey, whose works include Not Just for the Money: An Economic Theory of Human Motivation (Cheltenham, England, 1997). For a review of the relevant literature with a focus on behavioral economics, which concludes that “behavioral economics clearly shows that the universal application of pay-for-performance as practiced today is not warranted by scientific facts,” see Antoinette Weibel, Meike Wiemann, and Margit Osterloh, “A Behavioral Economics Perspective on the Overjustification Effect: Crowding-In and Crowding-Out of Intrinsic Motivation,” in Marylène Gagné (ed.), The Oxford Handbook of Work Engagement, Motivation, and Self-Determination Theory (New York, 2014).
9. Pittman, Boggiano, and Ruble, “Intrinsic and Extrinsic Motivational Orientations.”
10. Bénabout and Tirole, “Intrinsic and Extrinsic Motivation,” p. 504.
11. Bruno S. Frey and Margit Osterloh, “Motivate People with Prizes,” Nature 465, no. 17 (June 2010), p. 871.
12. George Akerlof, “Labor Contracts as a Partial Gift Exchange,” Quarterly Journal of Economics 97, no. 4 (1982), 543–69.
13. Bruno S. Frey and Reto Jegen, “Motivation Crowding Theory,” Journal of Economic Surveys 15, no. 5 (2001), pp. 589–611; and Robert Gibbons, “Incentives in Organizations,” Journal of Economic Perspectives 12, no. 4 (Fall 1998), pp. 115–32, esp. p. 129.
14. Gibbons, “Incentives in Organizations.”
15. Talbot, “Performance Management,” pp. 491–517; Adrian Wooldridge, Masters of Management (New York, 2011), pp. 318–19; Pollitt, “Towards a New World”; Christopher Hood, “The ‘New Public Management in the 1980s: Variations on a Theme,” Accounting, Organization, and Society 20, nos. 2/3 (1995), pp. 93–109; Christopher Hood and Guy Peters, “The Middle Aging of New Public Management: Into the Age of Paradox?” Journal of Public Administration Research and Theory 14, no. 3 (2004), pp. 267–82. On the background and early history of NPM in the United Kingdom and the United States, see Christopher Pollitt, Managerialism and the Public Services, 2nd ed. (Oxford, 1993).
CHAPTER 6. PHILOSOPHICAL CRITIQUES
1. Harry Braverman, Labor and Monopoly Capital (New York, 1974).
2. Michael Oakeshott, “Rationalism in Politics” (1947) in Oakeshott, Rationalism in Politics and Other Essays (Indianapolis, 1991).
3. Friedrich Hayek, “The Uses of Knowledge in Society,” “The Meaning of Competition,” and “‘Free’ Enterprise and Competitive Order,” all in Hayek, Individualism and Economic Order (Chicago, 1948).
4. Wolf, Does Education Matter? p. 246; Lorenz, “If You’re So Smart”; Bevan and Hood, “What’s Measured Is What Matters.” For an extended analysis of the ways in which the British higher education regime replicates features of the Soviet system, see Aviezer Tucker, “Bully U: Central Planning and Higher Education,” Independent Review 17, no. 1 (Summer 2012), pp. 99–119.
5. Alfie Kohn, Punished by Rewards (New York, 1999), pp. 62ff; and Teresa Amabile, “How to Kill Creativity,” Harvard Business Review (September–October 1998).
6. Scott, Seeing Like a State, p. 313.
7. Isaiah Berlin, “Political Judgment,” in Berlin, The Sense of Reality: Studies in Ideas and Their History, ed. Henry Hardy (New York, 1996), pp. 53, 50.
8. Elie Kedourie Diamonds into Glass: The Government and the Universities (London, 1988), reprinted in Elie Kedourie, “The British Universities under Duress,” Minerva 31, no. 1 (March, 1993), pp. 56–105.
9. Elie Kedourie, Perekstroika in the Universities (London, 1989), pp. x–xi.
10. Kedourie, Perestroika, p. 29.
11. Kedourie “The British Universities under Duress,” p. 61.
12. Background information on GPRA at http://www.foreffectivegov.org/node/326, and Donald P. Moynihan and Stephane Lavertu, “Does Involvement in Performance Management Routines Encourage Performance Information Use? Evaluating GPRA and PART” Public Administration Review 72, no. 4 (July/August 2012), pp. 592–602.
CHAPTER 7. COLLEGES AND UNIVERSITIES
1. Department of Education, “For Public Feedback: A College Ratings Framework” (December, 2014), http://www2.ed.gov/documents/college-affordability/college-ratings-fact-sheet.pdf.
2. https://www.luminafoundation.org/files/publications/stronger_nation/2016/A_Stronger_Nation-2016-National.pdf.
3. Wolf, Does Education Matter?
4. Wolf, Does Education Matter?; Jaison R. Abel, Richard Deitz, and Yaquin Su, “Are Recent College Graduates Finding Good Jobs?” Federal Reserve Bank of New York: Current Issues in Economics and Finance 20, no. 1 (2014); Paul Beaudry, David A. Green, Benjamin M. Sand, “The Great Reversal in the Demand for Skill and Cognitive Tasks,” NBER Working Paper 18901, March 2013.
5. See, for example, Katherine Mangan, “High-School Diploma Options Multiply, but May Not Set Up Students for College Success,” Chronicle of Higher Education, October 19, 2015.
6. Scott Jaschik, “ACT Scores Drop as More Take Test,” Inside Higher Education, August 24, 2016; and “ACT Scores Down for 2016 U.S. Grad Class Due to Increased Percentage of Students Tested,” http://www.act.org/content/act/en/newsroom/act-scores-down-for-2016-us-grad-class-due-to-increased-percentage-of-students-tested.html.
7. William G. Bowen and Michael S. McPherson, Lesson Plan: An Agenda for Change in American Higher Education (Princeton, 2016), p. 30.
8. See, for example, Tucker, “Bully U,” p. 104.
9. Valen E. Johnson, Grade Inflation: A Crisis in College Education (New York, 2003).
10. John Bound, Michael F. Lovenheim, and Sarah Turner, “Increasing Time to Baccalaureate Degree in the United States,” NBER Working Paper 15892, April 2010, p. 13; and Sarah E. Turner, “Going to College and Finishing College. Explaining Different Educational Outcomes,” in Caroline M. Hoxby (ed.) College Choices: The Economics of Where to Go, When to Go, and How to Pay for It (Chicago, 2004), pp. 13–62, http://www.nber.org/chapters/c10097, passim.
11. Arnold Kling and John Merrifield, “Goldin and Katz and Education Policy Failings,” Econ Journal Watch 6, no. 1 (January 2009), pp. 2–20, esp. p. 14.
12. Wolf, Does Education Matter? chap. 7.
13. Lorelle L. Espinosa, Jennifer R. Crandall, and Malika Tukibayeva, Rankings, Institutional Behavior, and College and University Choice (Washington, D.C., American Council on Education, 2014), p. 12.
14. Wolf, Does Education Matter? chap. 7; similarly Daron Acemoglu and David Autor, “What Does Human Capital Do?” Journal of Economic Literature 50, no. 2 (2012), pp. 426–63.
15. Wolf, Does Education Matter? chaps. 2 and 6; Paul Beaudry, David A. Green, and Benjamin M. Sand, “The Great Reversal in the Demand for Skill and Cognitive Tasks,” NBER Working Paper 18901, March 2013.
16. Stuart Eizenstat and Robert Lerman, “Apprenticeships Could Help U.S. Workers Gain a Competitive Edge” (Washington, D.C., Urban Institute, May 2013); Mark P. Mills, “Are Skilled Trades Doomed to Decline?” Manhattan Institute, New York, 2016, http://www.manhattan-institute.org/sites/default/files/IB-MM-1016.pdf.
17. Thomas Hale and Gonzalo Viña, “University Challenge: The Race for Money, Students and Status,” Financial Times, June 23, 2016; https://www.oecd.org/unitedkingdom/United%20Kingdom-EAG2014-Country-Note.pdf. Stefan Collini, in What Are Universities For? gives a figure of 45 percent in 2012 for enrollment in higher education.
18. For a brief history, see Stefan Collini, What Are Universities For? chap. 2.
19. Wolf, Does Education Matter? chap. 7.
20. Shore, “Audit Culture and Illiberal Governance,” pp. 289–90. See also James Wilsdon et al., The Metric Tide: Report of the Independent Review of the Role of Metrics in Research Assessment and Management (July 2015).
21. Stephen Prickett, Introduction to Education! Education! Education!
22. Charlton, “Audit, Accountability, Quality and All That,” p. 23.
23. http://www2.ed.gov/admins/finaid/accred/accreditation_pg6.html.
24. Peter Augustine Lawler, “Truly Higher Education,” National Affairs (Spring 2015), pp. 114–30, esp. pp. 120–21.
25. Charlton, “Audit, Accountability, Quality and All That,” p. 22; and Lorenz, “If You’re So Smart.” p. 609.
26. Benjamin Ginsberg, The Fall of the Faculty: The Rise of the All Administrative University (Baltimore, 2013).
27. Craig Totterow and James Evans, “Reconciling the Small Effect of Rankings on University Performance with the Transformational Cost of Conformity” in Elizabeth Popp Berman and Catherine Paradeise (eds.), The University under Pressure, Research in the Sociology of Organizations, vol. 4 (Bingley, England, 2016), pp. 265–301, and Tucker, “Bully U,” p. 114.
28. Wendy Nelson Espeland and Michael Sauder, “Rankings and Reactivity: How Public Measures Re-create Social Worlds,” American Journal of Sociology 113, no. 1 (July 2007), pp. 1–40, esp. p. 11.
29. Ibid., p. 25.
30. Ibid., p. 26.
31. Ibid., pp. 30–31. For more on how some law schools game the statistics, see Alex Wellen, “The $8.78 Million Maneuver,” New York Times, July 31, 2005. For more on how universities attempt to rise in the rankings, see Wendy Nelson Espeland and Michael Sauder, “The Dynamism of Indicators” in Davis et al. (eds.) Governance by Indicators, pp. 103–5.
32. See, for example, Doug Lederman, “‘Manipulating,’ Er, Influencing ‘U.S. News,’” Inside Higher Ed, June 3, 2009.
33. Totterow and Evans, “Reconciling the Small Effect of Rankings on University Performance with the Transformatonal Cost of Conformity.”
34. On the early history of this, see Collini, What Are Universities For? chap. 6, “Bibliometry.”
35. Prickett, Introduction to Education! Education! Education! p. 7.
36. Peter Weingart, “Impact of Bibliometrics upon the Science System: Inadvertent Consequences,” Scientometrics 62, no. 1 (2005), pp. 117–31, esp. p. 126.
37. Ibid., p. 127; see also Christian Fleck, “Impact Factor Fetishism,” European Journal of Sociology 54, no. 2 (2013), pp. 327–56. On the difficulties of comparing research productivity among disciplines, see Dorothea Jansen et al., “Drittmittel als Performanzindikator der wissenschaftlichen Forschung: Zum Einfluss von Rahmenbedingungen auf Forschungsleistung,” Kölner Zeitschrift für Soziologie und Sozialpsychologie 59, no 1 (2007), pp. 125–49.
38. See on these issues, Weingart, “Impact of Bibliometrics upon the Science System,” and Michael Power, “Research Evaluation in the Audit Society,” in Hildegard Matthies and Dagmar Simon (eds.), Wissenschaft unter Beobachtung: Effekte und Defekte von Evaluationen (Wiesbaden, 2008), pp. 15–24.
39. Carl T. Bergstrom, “Use Ranking to Help Search,” Nature 465, no. 17 (June 2010), p. 870.
40. Espeland and Sauder, “Rankings and Reactivity,” p. 15. See too Münch, Globale Eliten, lokale Autoritäten.
41. Espinosa, Crandall, and Tukibayeva, Rankings, Institutional Behavior, and College and University Choice; Douglas Belkin, “Obama Spells Out College-Ranking Framework,” Wall Street Journal, December 19, 2014; Jack Stripling, “Obama’s Legacy: An Unlikely Hawk on Higher Ed,” Chronicle of Higher Education, September 30, 2016.
42. Jonathan Rothwell, “Understanding the College Scorecard,” paper, Brookings Institution, September 28, 2015, https://www.brookings.edu/opinions/understanding-the-college-scorecard/; Beckie Supiano, “Early Evidence Shows College Scorecard Matters, but Only to Some,” Chronicle of Higher Education, May 27, 2016.
43. See Lauren A. Rivera, Pedigree: How Elite Students Get Elite Jobs (Princeton, 2015); and Elizabeth A. Armstrong and Laura T. Hamilton, Paying for the Party: How College Maintains Inequality (Cambridge, Mass., 2013).
44. Rothwell, “Understanding the College Scorecard.”
45. Jeffrey Steedle, “On the Foundations of Standardized Assessment of College Outcomes and Estimating Value Added,” in K. Carey and M. Schneider (eds.), Accountability in Higher Education (New York, 2010), p. 8.
46. See, among many other critiques, Nicholas Tampio, “College Ratings and the Idea of the Liberal Arts, JSTOR Daily, July 8, 2015, http://daily.jstor.org/college-ratings-idea-liberal-arts/, and James B. Stewart, “College Rankings Fail to Measure the Influence of the Institution,” New York Times, October 2, 2015.
47. Robert Grant, “Education, Utility and the Universities” in Prickett and Erskine-Hill (eds.), Education! Education! Education! p. 52.
48. See Rivera, Pedigree, p. 78 and passim.
49. Espinosa, Crandall, and Tukibayeva, Rankings, Institutional Behavior, and College and University Choice, p. 9.
CHAPTER 8. SCHOOLS
1. Ravitch, The Death and Life of the Great American School System, p. 149.
2. T. S. Dee and B. Jacob, “The Impact of ‘No Child Left Behind’ on Student Achievement,” Journal of Policy Analysis and Management 30 (2011), pp. 418–46.
3. Jesse Rhodes, An Education in Politics: The Origins and Evolution of No Child Left Behind (Ithaca, N.Y., 2012), p. 88.
4. Quoted in ibid., p. 88.
5. Ibid., p. 153.
6. Goldstein, Teacher Wars, p. 188.
7. Diane Ravitch, Reign of Error (New York, 2013), p. 51 and charts on pp. 340–42; and Kristin Blagg and Matthew M. Chingos, Varsity Blues: Are High School Students Being Left Behind? (Washington, D.C.: Urban Institute, May 2016), pp. 3–5.
8. Dee and Jacob, “The Impact of ‘No Child Left Behind’ on Student Achievement,” pp. 418–46. See also, Ravitch, The Death and Life of the Great American School System, pp. 107–8, 159; Goldstein, Teacher Wars, p. 187; and American Statistical Association, “ASA Statement on Using Value-Added Models for Educational Assessment, April 8, 2014,” https://www.amstat.org/policy/pdfs/ASA_VAM_Statement.pdf.
9. Goldstein, Teacher Wars, p. 226.
10. Ibid. For an argument in favor of value-added testing over evaluating schools based on “proficiency” or “college-readiness,” see Michael J. Petrilli and Aaron Churchill, “Why States Should Use Student Growth, and Not Proficiency Rates, when Gauging School Effectiveness,” Thomas Fordham Institute, October 13, 2016, https://edexcellence.net/articles/why-states-should-use-student-growth-and-not-proficiency-rates-when-gauging-school.
11. Martin R. West, written statement to U.S. Senate Committee on Health, Education, Labor, and Pensions, January 21, 2015, http://www.help.senate.gov/imo/media/doc/West.pdf, and David J. Deming et al., “When Does Accountability Work?” educationnext.org (Winter 2016), pp. 71–76. On Florida, David N. Figlio and Lawrence S. Getzler, “Accountability, Ability, and Disability: Gaming the System,” NBER Working Paper No. 9307, October 2002.
12. On Houston and Dallas, see Ravitch, Death and Life, p. 155; on Atlanta, see Rachel Aviv, “Wrong Answer: In an Era of High-Stakes Testing, a Struggling School Made a Shocking Choice,” The New Yorker, July 21, 2014, pp. 54–65; on Chicago, see Brian A. Jacob and Steven D. Levitt, “Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating,” Quarterly Journal of Economics 118, no. 3 (August, 2003), pp. 843–77; on “scrubbing” in Cleveland, Ravitch, Death and Life, p. 159. Also Goldstein, Teacher Wars, p. 227.
13. Goldstein, Teacher Wars, pp. 186, 209.
14. Alison Wolf, Does Education Matter? Similarly, Donald T. Campbell, “[A]chievement tests may well be valuable indicators of general school achievement under conditions of normal teaching aimed at general competence. But when test scores become the goal of the teaching process, they both lose their value as indicators of educational status and distort the educational process in undesirable ways,” quoted in Mark Palko and Andrew Gelman, “How Schools that Obsess about Standardized Tests Ruin Them as Measures of Success,” Vox: Policy and Politics, August 16, 2016, http://www.vox.com/2016/8/16/12482748/success-academy-schools-standardized-tests-metrics-charter.
15. “We believe that the system is now out of balance in the sense that the drive to meet government-set targets has too often become the goal rather than the means to the end of providing the best possible education for all children. This is demonstrated in phenomena such as teaching to the test, narrowing the curriculum and focusing disproportionate resources on borderline pupils. We urge the Government to reconsider its approach in order to create incentives to schools to teach the whole curriculum and acknowledge children’s achievements in the full range of the curriculum. The priority should be a system which gives teachers, parents and children accurate information about children’s progress.” (Paragraph 82). Select Committee on Children, Schools and Families, Third Report (2008). http://www.publications.parliament.uk/pa/cm200708/cmselect/cmchilsch/169/16912.htm.
16. Rhodes, An Education in Politics, p. 176.
17. Goldstein, Teacher Wars, pp. 213–17.
18. Goldstein, Teacher Wars, pp. 207–8.
19. Roland Fryer, “Teacher Incentives and Student Achievement: Evidence from New York City Public Schools,” NBER Working Paper No. 16850, March 2011.
20. Goldstein, Teacher Wars, pp. 224–26.
21. See the studies cited in Kohn, Punished by Rewards, p. 334, fn. 37.
22. Fryer, “Teacher Incentives and Student Achievement,” p. 3.
23. Frederick M. Hess, “Our Achievement-Gap Mania,” National Affairs (Fall 2011), pp. 113–29.
24. Lauren Musu-Gillette et al., Status and Trends in the Educational Achievement of Racial and Ethnic Groups 2016 (Washington, D.C.: National Center for Educational Statistics, 2016), p. iv.
25. For a recent confirmation of the Coleman Report’s original findings, and of their ongoing relevance, see Stephen L. Morgan and Sol Bee Jung, “Still No Effect of Resources, Even in the New Gilded Age,” Russell Sage Foundation Journal of the Social Sciences 2, no. 5 (2016), pp. 83–116.
26. Sean F. Reardon, The Widening Achievement Gap between the Rich and the Poor: New Evidence and Some Possible Explanations (Russell Sage Foundation, 2012), downloaded from https://cepa.stanford.edu/content/widening-academic-achievement-gap-between-rich-and-poor-new-evidence-and-possible.
27. Edward C. Banfield, The Unheavenly City Revisited (New York, 1974), pp. 273–74.
28. Among economists, the significance of these qualities has been emphasized by James Heckman, “Schools, Skills, and Synapses,” Economic Inquiry 46, no. 3 (July 2008), pp. 289–324. Of course, their importance has long been taken for granted by those not wedded to metric fixation. Character qualities of self-control and the ability to defer gratification, however, are themselves linked to cognitive ability, see Richard E. Nisbett et al., “Intelligence: New Findings and Theoretical Developments,” American Psychologist 67, no. 2 (2012), pp. 130–59, esp. p. 151.
29. Alexandria Neason, “Welcome to Kindergarten. Take This Test. And This One.” Slate, March 4, 2015.
30. Nisbett et al., “Intelligence,” p. 138.
31. Angela Duckworth, “Don’t Grade Schools on Grit,” New York Times, March 27, 2016.
32. Hess, “Our Achievement-Gap Mania,” and Wolf, Does Education Matter? The declining support for programs for gifted children in Europe is noted in Tom Clynes “How to Raise a Genius: Lessons from a 45-Year Study of Super-smart Children,” Nature 537, no. 7619 (September 7, 2016).
33. Ravitch, Death and Life, passim., and Kenneth Berstein, “Warning from the Trenches: A High School Teacher Tells College Educators What They Can Expect in the Wake of ‘No Child Left Behind’ and ‘Race to the Top,’” Academe (January–February 2013), http://www.aaup.org/article/warnings-trenches#.VN62JMZQ2AE; and the powerful testimony of “Teacher of the Year” Anthony J. Mullen, “Teachers Should be Seen and Not Heard,” Education Week, January 7, 2010, http://blogs.edweek.org/teachers/teacher_of_the_year/2010/01/teachers_should_be_seen_and_no.html.
CHAPTER 9. MEDICINE
1. Sean P. Keehan et al., “National Health Expenditure Projections, 2015–2025: Economy, Prices, and Aging Expected to Shape Spending and Enrollment,” Health Affairs 35, no. 8 (August 2016), pp. 1–10; Atul Gawande, “The Checklist,” New Yorker, December 10, 2007.
2. World Health Report 2000, Health Systems: Improving Performance, quoted in Scott Atlas, In Excellent Health: Setting the Record Straight on America’s Health Care (Stanford, Calif., 2011).
3. Atlas, In Excellent Health.
4. Ibid., pp. 28–30, 99–105.
5. Ibid., p. 84; and David M. Cutler, Adriana Lleras-Muney, and Tom Vogl, “Socioeconomic Status and Health: Dimensions and Mechanisms,” in Sherry Glied and Peter C. Smith (eds.), The Oxford Handbook of Health Economics (New York, 2011), pp. 124–63, esp. 147–53.
6. Atlas, In Excellent Health, p. 156.
7. Michael E. Porter and Thomas H. Lee, “The Strategy That Will Fix Health Care,” Harvard Business Review (October 2013), pp. 50–70, esp. 56.
8. The discussion of Geisinger is based on Douglas McCarthy, Kimberly Mueller, and Jennifer Wrenn, Geisinger Health System: Achieving the Potential of Integration through Innovation, Leadership, Measurement, and Incentives (Commonweatlh Fund Case Study, June 2009), and Glenn D. Steele, Jr., “A Proven New Model for Reimbursing Physicians,” Harvard Business Review (September 15, 2015), by the former CEO of Geisinger.
9. Peter J. Pronovost et al., “Sustaining Reductions in Central Line-Associated Bloodstream Infections in Michigan Intensive Care Units: A 10-Year Analysis,” American Journal of Medical Quality 31, no. 3 (2016), pp. 197–202.
10. Chinitz and Rodwin, “What Passes and Fails as Health Policy and Management,” p. 1117.
11. For example, Patrick Conway, Farzad Mostashari, and Carolyn Clancy, “The Future of Quality Measurement for Improvement and Accountability,” JAMA [Journal of the American Medical Association] 309, no. 21 (June 5, 2013), pp. 2215–16; James F. Burgess and Andrew Street, “Measuring Organizational Performance,” in Sherry Glied and Peter C. Smith (eds.), The Oxford Handbook of Health Economics (New York, 2011), pp. 688–706, esp. p. 701; David M. Shahian et al., “Rating the Raters: The Inconsistent Quality of Health Care Performance Measurement,” Annals of Surgery 264, no. 1 (July 2016), pp. 36–38; J. Matthew Austin, Elizabeth A. McGlynn, and Peter J. Pronovost, “Fostering Transparency in Outcomes, Quality, Safety, and Costs,” JAMA 316, no. 16 (October 25, 2016), pp. 1661–62.
12. On the propensity to call for better metrics, see Chinitz and Rodwin, “What Passes and Fails as Health Policy and Management,” p. 1120.
13. Jason H. Wasfy et al., “Public Reporting in Cardiovascular Medicine: Accountability, Unintended Consequences, and Promise for Improvement,” Circulation 131, no. 17 (April 28, 2015), pp. 1518–27.
14. Chinitz and Rodwin, “What Passes and Fails as Health Policy and Management,” p. 1118.
15. N. A. Ketallar et al., “Public Release of Performance Data in Changing the Behaviour of Healthcare Consumers, Professionals or Organisations” Cochrane Database System Review, Nov. 9, 2011.
16. Gary Y. Young, Howard Beckman, and Errol Baker, “Financial Incentives, Professional Values and Performance,” Journal of Organizational Behavior 33 (2012), pp. 964–983.
17. Elaine M. Burns, Chris Pettengell, Thanos Athanasious, and Ara Darzi, “Understanding the Strengths and Weaknesses of Public Reporting of Surgeon-Specific Outcomes,” Health Affairs 35, no. 3 (March 2016), pp. 415–21, esp. p. 416.
18. D. Blumenthal, E. Malphrus, and J. M. McGinnis (eds.), Vital Signs: Core Metrics for Health and Health Care Progress (Washington, 2015), p. 90. On the use of “star ratings” by the National Health Service in England, see Bevan and Hood “What’s Measured Is What Matters.”
19. Chinitz and Rodwin, “What Passes and Fails as Health Policy and Management,” pp. 1114–19.
20. Karen E. Joynt et al., “Public Reporting of Mortality Rates for Hospitalized Medicare Patients and Trends in Mortality for Reported Conditions,” Annals of Internal Medicine, published online May 31, 2016.
21. M. W. Friedberg et al., “A Methodological Critique of the ProPublica Surgeon Scorecard” (Rand Corporation, Santa Monica, Calif., 2015), http://www.rand.org/pubs/perspectives/PE170.html, and David M. Shahian et al., “Rating the Raters: The Inconsistent Quality of Health Care Performance Measurement,” Annals of Surgery 264, no. 1 (July 2016), pp. 36–38.
22. Cheryl L. Damberg et al., Measuring Success in Health Care Value-Based Purchasing Programs: Summary and Recommendations (Rand Corporation, 2014), p. 18. Rachel M. Werner et al., “The Effect of Pay-for-Performance in Hospitals: Lessons for Quality Improvement,” Health Affairs 30, no. 4 (April 2011), pp. 690–98. Similarly, and most recently, Aaron Mendelson et al., “The Effects of Pay-for-Performance Programs on Health, Health Care Use, and Processes of Care: A Systematic Review,” Annals of Internal Medicine 165, no. 5 (March 7, 2017), pp. 341–53.
23. Patricia Ingraham, “Of Pigs in Pokes and Policy Diffusion: Another Look at Pay for Performance,” Public Administration Review 53 (1993), pp. 348–56; Christopher Hood and Guy Peters, “The Middle Aging of New Public Management: Into the Age of Paradox?” Journal of Public Administration Research and Theory 14, no. 3 (2004), pp. 267–82; Chinitz and Rodwin, “What Passes and Fails as Health Policy and Management,” pp. 1113–26.
24. Martin Roland and Stephen Campbell, “Successes and Failures of Pay for Performance in the United Kingdom,” New England Journal of Medicine 370 (May 15, 2014), pp. 1944–49. The phrase “treating to the test” comes from Chinitz and Rodwin, “What Passes and Fails as Health Policy and Management,” p. 1115.
25. Burns et al., “Understanding the Strengths and Weaknesses of Public Reporting of Surgeon-Specific Outcomes,” p. 418; and Wasfy et al., “Public Reporting in Cardiovascular Medicine”; and K. E. Joynt et al., “Association of Public Reporting for Percutaneous Coronary Intervention with Utilization and Outcomes among Medicare Beneficiaries with Acute Myocardial Infarction,” JAMA 308, no. 14 (2012), pp. 1460–68; Joel M. Kupfer, “The Morality of Using Mortality as a Financial Incentive: Unintended Consequences and Implications for Acute Hospital Care,” JAMA 309, no. 21 (June 3, 2013), pp. 2213–14.
26. Richard Lilford and Peter Pronovost, “Using Hospital Mortality Rates to Judge Hospital Performance: A Bad Idea that Just Won’t Go Away,” British Medical Journal (April 10, 2010).
27. Ibid.
28. D. Blumenthal, E. Malphrus, and J. M. McGinnis (eds.), Vital Signs: Core Metrics for Health and Health Care Progress (Washington, D.C., 2015).
29. Ibid., pp. 90–91.
30. Robert Pear, “Shaping Health Policy for Millions, and Still Treating Some on the Side,” New York Times, March 29, 2016.
31. Donald M. Berwick, “The Toxicity of Pay for Performance,” Quality Management in Health Care 4, no. 1 (1995), pp. 27–33.
32. Wasfy et al., “Public Reporting in Cardiovascular Medicine”; Claire Noel-Mill and Keith Lind, “Is Observation Status Substituting for Hospital Readmission?” Health Affairs Blog, October 28, 2015; as well as https://www.medicare.gov/hospitalcompare/Data/30-day-measures.html.
33. David Himmelstein and Steffie Woolhandler, “Quality Improvement: ‘Become Good at Cheating and You Never Need to Become Good at Anything Else’” Health Affairs Blog, August 27, 2015.
34. Sabriya Rice, “Medicare Readmission Penalties Create Quality Metrics Stress,” Modern Healthcare, August 8, 2015.
35. Shannon Muchmore, “Bill Targets Socio-economic Factors in Hospital Readmissions,” Modern Healthcare, May 19, 2016.
36. See for example Michael L. Barnett, John Hsu, and Michael J. McWilliams, “Patient Characteristics and Differences in Hospital Readmission Rates,” JAMA Internal Medicine 175, no. 11 (November 2015), pp. 1803–12; and Shannon Muchmore, “Readmissions May Say More about Patients than Care,” Modern Healthcare (September 14, 2015).
CHAPTER 10. POLICING
1. Barry Latzer, The Rise and Fall of Violent Crime in America (San Francisco, 2016).
2. On Compstat, see Ken Peak and Emmanuel P. Barthe “Community Policing and CompStat: Merged, or Mutually Exclusive?” The Police Chief 76, no. 12 (December 2009); John Eterno and Eli Silverman, The Crime Numbers Game: Management by Manipulation (Boca Raton, 2012); Heather Mac Donald, “Compstat and Its Enemies,” City Journal, February 17, 2010, offers a critique of earlier claims by Eterno and Silverman.
3. Donald T. Campbell, “Assessing the Impact of Planned Social Change” (1976), Journal of Multidisciplinary Evaluation (February 2011), p. 34.
4. See, for example, David Bernstein and Noah Isackson, “The Truth about Chicago’s Crime Rates: Part 2,” Chicago Magazine, May 19, 2014.
5. Mac Donald, “Compstat and Its Enemies.”
6. “Police Fix Crime Statistics to Meet Targets, MPs Told,” BBC News, November 19, 2013, http://www.bbc.com/news/uk-25002927.
7. Ed Burns interview on “Fresh Air,” National Public Radio, November 22, 2006. See also David Simon interview with Bill Moyers, at www.pbs.org/moyers/journal/04172009/transcript1.html.
8. Campbell, “Assessing the Impact,” p. 35.
CHAPTER 11. THE MILITARY
1. Jonathan Schroden, a scholar at the Naval War College, concludes that current methods of COIN assessment are so faulty that it would be better to “stop doing operations assessments altogether.” Jonathan Schroden, “Why Operations Assessments Fail: It’s Not Just the Metrics,” Naval War College Review 64, no. 4 (Autumn 2011), pp. 89–102, esp. 99.
2. Connable, Embracing the Fog of War, chap. 6.
3. David Kilcullen, Counterinsurgency (New York, 2010), p. 2.
4. Ibid., pp. 56–57.
5. Ibid., pp. 58–59.
6. Ibid., p. 60.
7. Connable, Embracing the Fog of War, pp. xv, xx.
8. Jan Osborg et al., Assessing Locally Focused Stability Operations (Rand Corporation, 2014), p. 9.
9. Connable, Embracing the Fog of War, p. 29.
CHAPTER 12. BUSINESS AND FINANCE
1. http://www.simon.rochester.edu/fac/misra/mkt_salesforce.pdf.
2. Barry Gruenberg, “The Happy Worker: An Analysis of Educational and Occupational Differences in Determinants of Job Satisfaction,” American Journal of Sociology 86 (1980), pp. 247–71, esp. pp. 267–68, quoted in Kohn, Punishment by Rewards, p. 131.
3. Erik Brynjolfsson and Andrew McAfee, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (New York, 2014).
4. Dan Cable and Freck Vermeulen, “Why CEO Pay Should Be 100% Fixed,” Harvard Business Review (February 23, 2016).
5. Madison Marriage and Aliya Ram, “Two Top Asset Managers Drop Staff Bonuses,” Financial Times, August 22, 2016.
6. Jeffrey Preffer and Robert I. Sutton, “Evidence-Based Management,” Harvard Business Review (January 2006), pp. 63–74, esp. p. 68.
7. Boris Ewenstein, Bryan Hancock, and Asmus Komm, “Ahead of the Curve: The Future of Performance Management,” McKinsey Quarterly, no. 2 (2006), pp. 64–73, esp. p. 72.
8. Ewenstein et al., “Ahead of the Curve,” pp. 67–68.
9. Tyler Cowen and Alex Tabarrok, Modern Principles of Macroeconomics, 3rd ed. (New York, 2014), p. 413.
10. Mark Maremont, “EpiPen Maker Dispenses Outsize Pay,” Wall Street Journal, September 13, 2016; and Tara Parker-Pope and Rachel Rabkin Peachman, “EpiPen Price Rise Sparks Concern for Allergy Sufferers,” New York Times, August 22, 2016.
11. Matt Levine, “Wells Fargo Opened a Couple Million Fake Accounts,” Bloomberg.com, September 9, 2016; and United States of America Consumer Financial Protection Bureau, Administrative Proceeding 2016-CFPB-0015, Consent Order.
12. For other examples, see Gibbons, “Incentives in Organizations,” p. 118.
13. Ferraro, Pfeffer, and Sutton, “Economics Language and Assumptions.”
14. Douglas H. Frank and Tomasz Obloj, “Firm-Specific Human Capital, Organizational Incentives, and Agency Costs: Evidence from Retail Banking,” Strategic Management Journal 35 (2014), pp. 1279–301.
15. These examples are cited in ibid., p. 1282.
16. The account that follows draws upon Amar Bhidé, “An Accident Waiting to Happen,” Critical Review 21, nos. 2–3 (2009), pp. 211–47; and Bhidé, A Call for Judgment: Sensible Finance for a Dynamic Economy (New York, 2010), esp. “Introduction”; and Arnold Kling, “The Financial Crisis: Moral Failure or Cognitive Failure?” Harvard Journal of Law and Public Policy 33, no. 2 (2010), pp. 507–18, and Arnold Kling, Specialization and Trade (Washington, D.C., 2016).
17. Kling, “The Financial Crisis”; and Kling, Specialization and Trade, pp. 182–83.
18. Lawrence G. McDonald with Patrick Robinson, A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers (New York, 2009), pp. 106–9.
19. Amar Bhidé, “Insiders and Outsiders,” Forbes, September 24, 2008.
20. The paragraphs that follow draw upon Jerry Z. Muller, “Capitalism and Inequality: What the Right and the Left Get Wrong,” Foreign Affairs (March–April 2013), pp. 30–51.
21. Hyman P. Minsky, “Uncertainty and the Institutional Structure of Capitalist Economies,” Journal of Economic Issues 30, no. 2 (June 1996), pp. 357–68; Levy Economics Institute, Beyond the Minsky Moment (e-book, April 2012); Alfred Rappaport, Saving Capitalism from Short-Termism (New York, 2011).
22. On the propensity for short-termism of publicly traded companies, see John Asker, Joan Farre-Mensa, and Alexander Ljungqvist, “Corporate Investment and Stock Market Listing: A Puzzle?” Review of Financial Studies 28, no. 2 (2015), pp. 342–90.
23. http://www.businessinsider.com/blackrock-ceo-larry-fink-letter-to-sp-500-ceos-2016-2.
24. Klarman, A Margin of Safety.
25. Nelson P. Repenning and Rebecca M. Henderson, “Making the Numbers? ‘Short Termism’ and the Puzzle of Only Occasional Disaster,” Harvard Business School Working Paper 11–33, 2010. On the negative effects of some pay-for-performance schemes on trust, employee commitment, and institutional productivity, see Michael Beer and Mark D. Cannon, “Promise and Peril in Implementing Pay-for-Performance,” Human Resources Management 43, no. 1 (Spring 2004), pp. 3–48.
26. Michael C. Jensen, “Paying People to Lie: The Truth about the Budgeting Process,” European Financial Management 9, no. 3 (2003), pp. 379–406.
27. Gary P. Pisano and Willy C. Shih, “Restoring American Competitiveness,” Harvard Business Review (July 2009), pp. 11–12.
28. Yves Morieux of Boston Consulting Group, in his TED talk, “How Too Many Rules at Work Keep You from Getting Things Done,” July 2015; see also Morieux and Tollman, Six Simple Rules.
29. Frank Knight, Risk, Uncertainty, and Profit (New York, 1921).
30. Isabell Welpe, “Performance Paradoxon: Erfolg braucht Uneindeutigkeit: Warum es klug ist, sich nicht auf eine Erfolgskennzahl festzulegen,” Wirtschaftswoche July 31, 2015, p. 88.
CHAPTER 13. PHILANTHROPY AND FOREIGN AID
1. Ann Goggins Gregory and Don Howard, “The Nonprofit Starvation Cycle,” Stanford Innovation Review (Fall 2009); and “The Overhead Myth,” http://overheadmythcom.b.presscdn.com/wp-content/uploads/2013/06/GS_OverheadMyth_Ltr_ONLINE.pdf.
2. See, for example, P. T. Bauer, Dissent on Development (Cambridge, Mass., 1976).
3. Mark Moyar, Aid for Elites: Building Partner Nations and Ending Poverty through Human Capital (Cambridge, 2016), p. 188. The entire chapter on “Measurement” is invaluable.
4. Andrew Natsios, “The Clash of the Counter-Bureaucracy and Development” (2010), http://www.cgdev.org/publication/clash-counter-bureaucracy-and-development; and Natsios, “The Foreign Aid Reform Agenda,” Foreign Service Journal 86, no. 12 (December 2008), quoted in Moyar, Aid for Elites, pp. 188–89.
5. Unnamed USAID official, interviewed by Mark Moyar in 2012, and quoted in Moyar, Aid for Elites, p. 190.
6. Moyar, Aid for Elites, p. 186.
CHAPTER 14. WHEN TRANSPARENCY IS THE ENEMY OF PERFORMANCE: POLITICS, DIPLOMACY, INTELLIGENCE, AND MARRIAGE
1. Moshe Halbertal, Concealment and Revelation: Esotericism in Jewish Thought and Its Philosophical Implications, trans. Jackie Feldman (Princeton, 2007), pp. 142–43.
2. Tom Daschle, foreword to Jason Grumet, City of Rivals: Restoring the Glorious Mess of American Democracy (New York, 2014), p. x.
3. See on this Jonathan Rauch, “How American Politics Went Insane,” The Atlantic, July–August, 2016; Jonathan Rauch, “Why Hillary Clinton Needs to be Two-Faced,” New York Times, October 22, 2016; and Matthew Yglesias, “Against Transparency,” Vox, September 6, 2016.
4. Cass R. Sunstein, “Output Transparency vs. Input Transparency,” August 18, 2016, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2826009.
5. Wikipedia, “Chelsea Manning.”
6. Christian Stöcker, “Leak at WikiLeaks: A Dispatch Disaster in Six Acts,” Spiegel Online, September 1, 2011.
7. Halbertal, Concealment and Revelation, p. 164.
8. Joel Brenner, Glass Houses: Privacy, Secrecy, and Cyber Insecurity in a Transparent World (New York, 2013), p. 210.
CHAPTER 15. UNINTENDED BUT PREDICTABLE NEGATIVE CONSEQUENCES
1. Ravitch, The Death and Life of the Great American School System, p. 161; Stewart, The Management Myth, p. 54.
2. Holmström and Milgrom, “Multitask Principal-Agent Analyses.”
3. Merton, “Unanticipated Consequences and Kindred Sociological Ideas: A Personal Gloss,” p. 296.
4. Morieux and Tollman, Six Simple Rules, pp. 6–16.
5. Lilford and Pronovost, “Using Hospital Mortality Rates to Judge Hospital Performance.”
6. Berwick, “The Toxicity of Pay for Performance.”
7. On this topic, see George A. Akerlof and Rachel E. Kranton, Identity Economics: How Our Identities Shape Our Work, Wages, and Well-Being (Princeton, 2010), chap. 5, “Identity and the Economics of Organizations.”
8. Berwick, “The Toxicity of Pay for Performance.”
9. Edmund Phelps, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge and Change (Princeton, 2013), p. 269.
10. Similarly, Scott, Seeing Like a State, p. 313.
11. According to Dale Jorgenson of Harvard, the only source of growth of total factor productivity was in IT-producing industries. Dale W. Jorgenson, Mun Ho, and Jon D. Samuels, “The Outlook for U.S. Economic Growth,” in Brink Lindsey (ed.), Understanding the Growth Slowdown (Washington, D.C., 2015). On how behavioral metrics in human resources sap initiative, see Lutz, Car Guys vs. Bean Counters, pp. ix–x.
CHAPTER 16. WHEN AND HOW TO USE METRICS: A CHECKLIST
1. Young et al., “Financial Incentives, Professional Values and Performance,” Journal of Organizational Behavior 33 (2012), pp. 964–83, esp. p. 969.
2. Thomas Kochan, commentary on “Promise and Peril in Implementing Pay-for-Performance,” Human Resources Management 43, no. 1 (Spring 2004), pp. 35–37.
3. J. Matthew Austin, Elizabeth A. McGlynn, and Peter J. Pronovost, “Fostering Transparency in Outcomes, Quality, Safety, and Costs,” JAMA 316, no. 16 (October 25, 2016), pp. 1661–62.
4. B. S. Frey and M. Osterloh, Successful Management by Motivation. Balancing Intrinsic and Extrinsic Incentives (Heidelberg, 2002).
5. Kling, Specialization and Trade, p. 33.