# Often spending money is the primary goal over the output of that money Politics is a big reason this happens: a politician commits to spend $N Billion on technology development or some such. Look at that promise — there’s nothing about actually using money effectively or what the expected result from the spending will be (except for something vague like “unlock graphene”).[^1] The people who are responsible for then delivering on that promise are responsible not for any output but for making sure that money gets spent. So their KPIs become tied to the amount of money that’s spent, not how its spent or what the result is. As one can imagine, this incentivizes a different kind of spending than most non-politicians might hope for. Budget maintenance is the other big reason that spending money becomes a goal. Many bureaucratic systems have the rule that the next year’s budget is based on how much money a monetary division needed in the past year. On its surface this seems reasonable! Divisions’ needs change and you shouldn’t give extra money to a division that doesn’t need it. In situations that change slowly, like a water treatment service or IT department this logic makes sense. However, this doesn’t allow for a slow year/quarter followed by a quick activity ramp-up or simply pivoting between a set of cheap activities, like theory and simulation, and expensive ones, like experiments; something that is especially prevalent in research. Disappearing money is another reason that spending money becomes a primary goal. In situations like many grants, money is doled out based on time. You have $N/quarter, regardless of whether you use it or not. At the end of the quarter any unused money gets absorbed back into the magical money pool and you can’t get it back — internal divisions don’t have their own bank accounts. As a result peoples incentive is to spend the disappearing money on whatever they can, no matter how much of a waste it is because something is better than nothing. Disappearing money is often coupled to budget maintenance because the next budget looks at how much money was left unused at the end of a time period. ### Related * [[Asymmetric career risk]] * [[§Government Constraints]] * [[Organizations can get incomes via Contracts, budgets, or products]] [^1]: Yet another situation where [[More precise descriptions of technology could enable faster progress]] and [[What does ‘working’ mean?]] [Web URL for this note](http://notes.benjaminreinhardt.com/Often+spending+money+is+the+primary+goal+over+the+output+of+that+money) [Comment on this note](http://via.hypothes.is/http://notes.benjaminreinhardt.com/Often+spending+money+is+the+primary+goal+over+the+output+of+that+money)