Ethics and incentives: A political approach

Understood within an economic framework as a form of trade, incentives appear inherently ethical; understood as a form of power, incentives seem ethically suspect. Incentives, along with coercion and persuasion, are among the ways in which some people get others to do what they wand them to do. This paper analyzes incentives as a form of power in order to develop criteria for distinguishing legitimate from illegitimate uses of them. Whereas an economic approach focuses on voluntariness as the sole criterion in judging incentives, this political approach yields three standards: purpose, voluntariness, and effect on the character of the parties involved. The paper explores issues that arise in applying these standards. Framing the problem of incentives as a problem of power reveals the ethical issues with greater depth and complexity than placing incentives in an economic frame of reference.