the twisted incentive structure


Senior Member

The following is from Financial Times.

"According to officials in several Chinese cities, their solution is to break ground on entirely new districts and to offer land to “better quality” property developers at marked down prices. The hope is that developers will abandon the existing empty blocks, and build higher quality apartments that can be sold to consumers for big discounts because of the lower land costs.

In the twisted incentive structure of Chinese officialdom, this is rational because it will prompt the flow of fresh finance, revive land revenues and boost GDP. But if that sort of thinking prevails, it may turn out that merely breaking ground on Sky City was enough for the skyscraper curse to fall on China."

Then, what does the words "the twisted incentive structure" mean in this context?
  • Barque

    Senior Member
    "Twisted" here means "indirect". The sentence means that the incentive structures weren't very straightforward or systematic.


    Senior Member
    I am not sure it means 'indirect', but I agree about the incentive structure not being straightforward or systematic. The sentence tells me that what generally passes as normal incentives in the western economies is not necessarily incentives in China (for Chinese officialdom) and vice versa. The quote here does not say why this is so.
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