FOLLOW THE INCENTIVES
“confused by institutions? follow the money and power.”
The Lesson
When institutional behavior seems irrational, follow the incentives. Who benefits financially? Who gains power? Organizations optimize for their own survival and the interests of key stakeholders, not their stated missions. Funding sources shape behavior. Career incentives shape what people say. When you're confused about why institutions do strange things, map the money flows and power structures. The behavior usually makes perfect sense once you see who's actually being served. Don't assume incompetence when incentives explain the pattern.
Real-World Example
A founder is confused why an industry association opposes regulation that would help consumers. They follow the incentives: the association is funded by large incumbents who benefit from barriers to entry. The 'consumer protection' rhetoric is cover for protecting incumbents. Once you see the funding, the behavior is obvious. The founder learns to always ask 'who pays for this?' before trusting institutional positions.
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