What is Goodhart’s law in Public Policy?

  • This refers to the adage that any measure that becomes the target of a policy eventually stops being a useful measure.
  • This is because people simply trying to meet the target, as gauged by a certain measure, may fail to focus on the underlying basis of the target.
  • For instance, a government that is solely focussed on boosting gross domestic product may decide to engage in wasteful spending just to boost GDP even though such spending does not improve the living standards of citizens.
  • It is named after British economist Charles Goodhart who proposed it while serving as the chief economic adviser to the Bank of England.

Source:TH