Perverse incentives, Australia's (1790) death fleet & echoes today

January 16, 2017 4:42 AM

Contracts and convicts: how perverse incentives created the death fleet After Australia's First Fleet came the second fleet. Due to contract issues, many people died. (via @smurray38)

Dilemmas faced by governments writing contracts for complex human services today, such as trade-offs between price and quality, and how to capture motives and incentives effectively, were present over 200 years ago.

Nowhere are the hazards of perverse incentives more obvious than in the notorious tale of the second fleet in 1790, which led to the deaths of 40% of the convicts on board. This was bad even by the low standards of the day, when the average mortality rate hovered around 5-10%.

Conditions on the voyage — run by the slave trading company Camden, Calvert & King — were horrific. Prisoners were given as little food as possible and were kept chained in the hold for “the whole course of our long voyage” [...]

The timing of the article may be connected to the current Australian scandal involving recipients of social security payments facing demands for repayment based on automated and flawed calculations involving Public Servants facing dubious incentives.

Incomplete contracts were the focus of the most recent (yeah, sure, so-called) Economics Nobel Prize .

posted by hawthorne (8 comments total)

With the state of (increasingly privatised) British hospitals recently being described by the Red Cross as a "humanitarian crisis" under the current Conservative administration, this makes rather chilling reading on this side of the Atlantic. A worrying warning from history which I fear might not be heeded.
posted by A Robot Ninja at 5:07 AM on January 16, 2017 [2 favorites]

It's not a warning from history, it's a useful prototype and roadmap for future refinements.
posted by aramaic at 8:26 AM on January 16, 2017 [4 favorites]

Organisations considered for any government contract should be not-for-profit ones.
posted by asok at 8:51 AM on January 16, 2017 [3 favorites]

Imagine the outcry in the British press if it got out that any money was spent on the convicts' welfare. “SCUM LUXURY CRUISE AT YOUR EXPENSE”, the headlines would read, and that's only if the death rate was brought down to under 20%.
posted by acb at 9:10 AM on January 16, 2017 [8 favorites]

Family legend has it that our first ancestor to arrive in Australia was an animal attendant on this voyage. So, while all those people were suffering so horribly, my great-great-great whatever was making sure the colony's shiny new cattle were as comfortable as possible. I shudder to think of what they witnessed, and at the discrepancy between the conditions of the livestock and the poor people sharing a boat with them.
posted by threecheesetrees at 3:25 PM on January 16, 2017 [3 favorites]

I loved the detail of surplus provisions being sold for additional profit at the destination. Truly, what could go wrong with that arrangement?
posted by mrdaneri at 4:02 PM on January 16, 2017 [2 favorites]

England's death fleet, surely...
posted by awfurby at 6:16 PM on January 16, 2017 [3 favorites]

Plus ça change ...

ABC News, today : Audit alleges offshore detention contracts mismanaged. A report from the Australian National Audit Office (ANAO) finds "significant shortcomings" in the Department of Immigration and Border Protection's management of contracts for security and welfare services on Manus Island and Nauru.

Shortcomings like how the Department was warned in February 2015 that mould growth in tents on Nauru exceeded guidelines, endangering the health of inmates, yet by August 2016 the problem had still not been addressed. The audit also found discrepancies between incident reports and video documentation.

And WTF, this:

"For example, the department did not update its asset register and advise Comcover of new facilities in Nauru valued at $75 million," the report said. "As a consequence the facility was not insured when it burnt down in a riot in 2013, shortly after being commissioned."

[The full ANAO report, "Offshore Processing Centres in Nauru and Papua New Guinea - Contract Management of Garrison Support and Welfare Services", can be viewed at link.]posted by valetta at 10:56 PM on January 16, 2017 [2 favorites]