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Perverse Incentives

Perverse Incentives


I. Introduction

We live in a world awash in perverse incentives.

A perverse incentive is when the rules, structures, or practices of any system reward bad behavior or sociopathic outcomes.

I had to come up with my own definition because all of the official definitions claim that perverse incentives are unintended. However, after the events of the last four years many of us have grown skeptical that the harms we experience from bad policy and bad law are unintentional.

The cobra effect is a classic example of a perverse incentive. From Wikipedia:

The term cobra effect was coined by economist Horst Siebert based on a spectacular policy failure in India during British rule. The British government, concerned about the number of venomous cobras in Delhi, offered a bounty for every dead cobra. Initially, this was a successful strategy; large numbers of snakes were killed for the reward. Eventually, however, enterprising people began to breed cobras for the income. When the government became aware of this, the reward program was scrapped. When cobra breeders set their now-worthless snakes free, the wild cobra population further increased.

Photo credit: Kamalnv

Perverse incentives happen often in politics, economics, and public health (see examples here).

The iatrogenocide is the result of several perverse incentives.

II. The 1980 Bayh-Dole Act

The 1980 Bayh-Dole Act allows recipients of federal scientific research funding to patent and thus profit from their research. This applies to federal employees as well so the people who work at the NIH, FDA, and CDC who make the rules and give out the grant money can also profit from this system. Federal research grants are our tax dollars so in a previous era the thinking was that the public should own the intellectual property that comes from it.

With the 1980 Bayh-Dole Act the public bears all of the costs and the profits are privatized. The 1980 Bayh-Dole Act creates the perverse incentive for all government regulators to side with Pharma (that can commercialize their intellectual property) and against the public interest. The Bayh-Dole Act put the fox in charge of the henhouse. The purpose of the Bayh-Dole Act was to undermine the regulatory state and enrich big political donors and it is working exactly as planned.

Senators Birch Bayh and Bob Dole created a bipartisan disaster that destroyed American science and medicine.

III. The 1986 National Childhood Vaccine Injury Act

The 1986 National Childhood Vaccine Injury Act gives liability protection to Pharma and doctors in connection with any vaccines that are on the CDC’s childhood vaccine schedule. This creates the perverse incentive to add as many vaccines as possible to the schedule which explains why the schedule increased by 4x in the ensuing years (and will continue to increase until they are stopped). It also creates the perverse incentive for Pharma to not even bother improving vaccines or safety-testing them — that’s just unnecessary time and expense in an era where these companies cannot be sued. The 1986 Act is the catalyst for the iatrogenocide.

IV. The 2005 PREP Act

The 2005 Public Readiness and Emergency Preparedness (PREP) Act gives Pharma liability protection in the event of a declared public health emergency. From Wikipedia:

The act specifically affords to drug makers immunity from actions related to the manufacture, testing, development, distribution, administration and use of medical countermeasures against chemical, biological, radiological and nuclear agents of terrorism, epidemics, and pandemics.

Like the 1986 Act, the PREP Act creates the perverse incentive for Pharma to create dirty and dangerous vaccines. But it’s so much worse than that. The PREP Act actually creates the perverse incentive for the biowarfare industry to create and release gain-of-function viruses. As Robert Kennedy, Jr. explains in his new book, all gain-of-function research is labelled “dual-use” — so by their expansive definition all gain-of-function research is a countermeasure (against the imagined threats of other nations or terrorist actors) that is covered by the PREP Act. The PREP Act created the legal protections the biowarfare industry needed to release SARS-CoV-2 which has generated trillions of dollars for the ruling class.

V. 2024 WHO Pandemic Treaty

Now the World Health Organization Pandemic Preparedness Treaty is trying to set some kind of record for the worst perverse incentives in history. (Please read everything by James Roguski and Dr. Meryl Nass on this topic.) There are hundreds of reasons why this treaty must be stopped but for our purposes today I want to focus on one particularly catastrophic perverse incentive that has been proposed.

In the negotiations happening right now in Geneva, poor countries are arguing that if the next global pandemic starts in their country, they should get a royalty from any vaccine that is developed as a result.

The backstory is that poor countries have been complaining for years that Pharma was trying to steal local and indigenous knowledge (particularly in the Amazon jungle) about plants that cure disease. Brazil and other developing countries said that they should be paid for any medicines that result from that research. Fair enough.

But now public health intellectual property has morphed into something truly monstrous. Poor countries are now claiming that they should be paid for any disease discovered within their borders that then leads to treatments. The idea is that if a pandemic starts from a virus discovered in Thailand then Thailand should receive a royalty for any medicines (especially vaccines) that are developed to treat said virus. Poor countries are adamant about requiring this provision in the treaty. Had the WHO Pandemic Treaty been in place in 2019, China would have gotten a royalty from every one of the 13.5 billion Covid vaccine doses given worldwide.

Given that CRISPR and other emerging gene-editing tools make it relatively easy to edit genetic material including viruses, the WHO Pandemic Treaty would set off a gold rush of poor countries trying to create pandemics to profit from the intellectual property that is developed to treat that pandemic. It’s the cobra effect described above but in this case with viruses.

The WHO Pandemic Treaty takes the perverse incentives from the PREP Act that the US biowarfare industry used to get rich from Covid and extends that legal framework to the entire world. If approved, the WHO Pandemic Treaty will cause an endless series of man-made extinction-level events throughout the world.

VI. Conclusion

All of this begs the question though, why aren’t policymakers and elected officials better at anticipating the perverse incentives created by their actions?

In the US Congress most lawmakers are engaged in insider trading. So they are actually looking to profit from the perverse incentives created by these bad laws and policies. Furthermore, getting reelected requires massive donations from Pharma and other large industries. So if Pharma wants to write a bill that creates profitable perverse incentives, lawmakers are generally fine with that.

The representatives negotiating the WHO Pandemic Treaty are intentionally creating perverse incentives because pandemics are now a multi-trillion dollar industry, one of the few growth industries remaining in the world. It’s a vicious cycle. The more people are poisoned, the more the normal economy suffers, which makes the biowarfare industrial complex one of the few places where capital can still get a good return on investment.

So the key then to stopping the iatrogenocide is to:

  • Repeal the 1980 Bayh-Dole Act;
  • Repeal the 1986 National Childhood Vaccine Injury Act;
  • Repeal the 2005 PREP Act (and its subsequent amendments);
  • Defeat the WHO Pandemic Treaty and withdraw from the WHO; and
  • Ban stock trading by government officials.

That’s the platform that we must fight to achieve by any means necessary.

Republished from the author’s Substack

Published under a Creative Commons Attribution 4.0 International License
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  • Toby Rogers

    Toby Rogers has a Ph.D. in political economy from the University of Sydney in Australia and a Master of Public Policy degree from the University of California, Berkeley. His research focus is on regulatory capture and corruption in the pharmaceutical industry. Dr. Rogers does grassroots political organizing with medical freedom groups across the country working to stop the epidemic of chronic illness in children. He writes about the political economy of public health on Substack.

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