--- title: "Meaning & Key Takeaway of: A common problem plagues people who try…" description: "\"“A common problem plagues people who try to design institutions without accounting for hidden motives. First they identify the key goals that the insti..." image: "https://sms4smile.com/quotes/i/771/kevin-simler-14295_goals_a-common-problem-plagues-people-who-try_3066777.jpg" --- # A common problem plagues people who try to design… ![“A common problem plagues people who try to design institutions without accounting for hidden motives. First they identify the key goals that the institution “should” achieve. Then they search for a design that best achieves these goals, given all the constraints that the institution must deal…” quote by Kevin Simler](https://sms4smile.com/quotes/i/771/kevin-simler-14295_goals_a-common-problem-plagues-people-who-try_3066777.jpg) [Download](https://sms4smile.com/quotes/i/771/kevin-simler-14295_goals_a-common-problem-plagues-people-who-try_3066777.jpg) [Open image](https://sms4smile.com/quotes/i/771/kevin-simler-14295_goals_a-common-problem-plagues-people-who-try_3066777.jpg) > ““A common problem plagues people who try to design institutions without accounting for hidden motives. First they identify the key goals that the institution “should” achieve. Then they search for a design that best achieves these goals, given all the constraints that the institution must deal with. This task can be challenging enough, but even when the designers apparently succeed, they’re frequently puzzled and frustrated when others show little interest in adopting their solution. Often this is because they mistook professed motives for real motives, and thus solved the wrong problems. Savvy institution designers must therefore identify both the surface goals to which people give lip service and the hidden goals that people are also trying to achieve. Designers can then search for arrangements that actually achieve the deeper goals while also serving the surface goals—or at least giving the appearance of doing so. Unsurprisingly, this is a much harder design problem. But if we can learn to do it well, our solutions will less often meet the fate of puzzling disinterest. We should take a similar approach when reforming a preexisting institution by first asking ourselves, “What are this institution’s hidden functions, and how important are they?” Take education, for example. We may wish for schools that focus more on teaching than on testing. And yet, some amount of testing is vital to the economy, since employers need to know which workers to hire. So if we tried to cut too much from school’s testing function, we could be blindsided by resistance we don’t understand—because those who resist may not tell us the real reasons for their opposition. It’s only by understanding where the resistance is coming from that we have any hope of overcoming it. Not all hidden institutional functions are worth facilitating, however. Some involve quite wasteful signaling expenditures, and we might be better off if these institutions performed only their official, stated functions. Take medicine, for example. To the extent that we use medical spending to show how much we care (and are cared for), there are very few positive externalities. The caring function is mostly competitive and zero-sum, and—perhaps surprisingly—we could therefore improve collective welfare by taxing extraneous medical spending, or at least refusing to subsidize it. Don’t expect any politician to start pushing for healthcare taxes or cutbacks, of course, because for lawmakers, as for laypeople, the caring signals are what makes medicine so attractive. These kinds of hidden incentives, alongside traditional vested interests, are what often make large institutions so hard to reform. Thus there’s an element of hubris in any reform effort, but at least by taking accurate stock of an institution’s purposes, both overt and covert, we can hope to avoid common mistakes. “The curious task of economics,” wrote Friedrich Hayek, “is to demonstrate to men how little they really know about what they imagine they can design.”8”” [Kevin Simler](https://sms4smile.com/quotes/author/kevin-simler/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Effective institution design requires recognizing both explicit goals and hidden motives, aligning structures to serve both. **In simple terms:** Identify hidden motives and align design accordingly. Key Takeaway Design with hidden and surface goals in mind. Themes institution design motivation policy hidden incentives alignment Mood analytical pragmatic critical Type theoretical practical When to use this quote - education reform - organizational change - policy drafting - stakeholder negotiation Key Concepts principal‑agent problem institutional analysis behavioral economics Questions to Reflect On - What hidden motives might be driving resistance to a proposed change? - How can we test whether a hidden function is beneficial? A Different Perspective Overemphasis on hidden motives can complicate design and may legitimize inefficient practices. ★ ★ ★ ★ ★ No ratings yet [Design Institutions](https://sms4smile.com/quotes/about/design-institutions-5169313/) [Goals](https://sms4smile.com/quotes/about/goals/) [Hidden Goals](https://sms4smile.com/quotes/about/hidden-goals-5169315/) [Hidden Institutional](https://sms4smile.com/quotes/about/hidden-institutional-5169314/) [Institution Designers](https://sms4smile.com/quotes/about/institution-designers-5169312/) [Institution Hidden](https://sms4smile.com/quotes/about/institution-hidden-5169316/) [Lip service](https://sms4smile.com/quotes/about/lip-service/) [Vested interest](https://sms4smile.com/quotes/about/vested-interest/) ## Related quotes > [The debate that I'm interested in having is with seriously smart people about how we design institutions in the 21st century that will genuinely…](https://sms4smile.com/quotes/niall-ferguson/the-debate-that-i-m-interested-in-having-is-with-seriously-smart/) [Niall Ferguson](https://sms4smile.com/quotes/author/niall-ferguson/) > [“Laughter may not be nearly as expressive as language, but it has two properties that make it ideal for navigating sensitive topics. 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This is the path way to Heaven.](https://sms4smile.com/quotes/laozi/when-you-have-accomplished-your-goal-simply-walk-away-this-is-the/) [Laozi](https://sms4smile.com/quotes/author/laozi/) > [“What shapes us is not always our achievements but our omissions. Not lies; simply the truths we don’t tell.”](https://sms4smile.com/quotes/c-j-tudor/what-shapes-us-is-not-always-our-achievements-but-our-omissions-not/) [C.J. Tudor](https://sms4smile.com/quotes/author/c-j-tudor/) [Browse all 21,276 Goals quotes ](https://sms4smile.com/quotes/about/goals/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Quotation", "text": "“A common problem plagues people who try to design institutions without accounting for hidden motives. First they identify the key goals that the institution “should” achieve. Then they search for a design that best achieves these goals, given all the constraints that the institution must deal with. This task can be challenging enough, but even when the designers apparently succeed, they’re frequently puzzled and frustrated when others show little interest in adopting their solution. Often this is because they mistook professed motives for real motives, and thus solved the wrong problems. Savvy institution designers must therefore identify both the surface goals to which people give lip service and the hidden goals that people are also trying to achieve. Designers can then search for arrangements that actually achieve the deeper goals while also serving the surface goals—or at least giving the appearance of doing so. Unsurprisingly, this is a much harder design problem. But if we can learn to do it well, our solutions will less often meet the fate of puzzling disinterest. We should take a similar approach when reforming a preexisting institution by first asking ourselves, “What are this institution’s hidden functions, and how important are they?” Take education, for example. We may wish for schools that focus more on teaching than on testing. And yet, some amount of testing is vital to the economy, since employers need to know which workers to hire. So if we tried to cut too much from school’s testing function, we could be blindsided by resistance we don’t understand—because those who resist may not tell us the real reasons for their opposition. It’s only by understanding where the resistance is coming from that we have any hope of overcoming it. Not all hidden institutional functions are worth facilitating, however. Some involve quite wasteful signaling expenditures, and we might be better off if these institutions performed only their official, stated functions. Take medicine, for example. To the extent that we use medical spending to show how much we care (and are cared for), there are very few positive externalities. The caring function is mostly competitive and zero-sum, and—perhaps surprisingly—we could therefore improve collective welfare by taxing extraneous medical spending, or at least refusing to subsidize it. Don’t expect any politician to start pushing for healthcare taxes or cutbacks, of course, because for lawmakers, as for laypeople, the caring signals are what makes medicine so attractive. These kinds of hidden incentives, alongside traditional vested interests, are what often make large institutions so hard to reform. Thus there’s an element of hubris in any reform effort, but at least by taking accurate stock of an institution’s purposes, both overt and covert, we can hope to avoid common mistakes. “The curious task of economics,” wrote Friedrich Hayek, “is to demonstrate to men how little they really know about what they imagine they can design.”8”", "creator": { "@type": "Person", "name": "Kevin Simler" }, "isPartOf": { "@id": "https://sms4smile.com/quotes/#website" }, "url": "https://sms4smile.com/quotes/kevin-simler/a-common-problem-plagues-people-who-try-to-design-institutions/", "about": { "@type": "Thing", "name": "Goals" }, "@id": "https://sms4smile.com/quotes/kevin-simler/a-common-problem-plagues-people-who-try-to-design-institutions/#quotation", "image": { "@type": "ImageObject", "@id": "https://sms4smile.com/quotes/i/771/kevin-simler-14295_goals_a-common-problem-plagues-people-who-try_3066777.jpg", "contentUrl": "https://sms4smile.com/quotes/i/771/kevin-simler-14295_goals_a-common-problem-plagues-people-who-try_3066777.jpg", "url": "https://sms4smile.com/quotes/i/771/kevin-simler-14295_goals_a-common-problem-plagues-people-who-try_3066777.jpg", "width": 1080, "height": 1080, "caption": "“A common problem plagues people who try to design institutions without accounting for hidden motives. 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