An audit of the unresolved research questions posed at the close of Hood and Piotrowska (2020), 'Goodhart's Law and the Gaming of UK Public Spending Numbers'. That paper documented that meso-level public expenditure input numbers are gamed through creative categorization — the strategic reassignment of units of spending among budget categories — with material consequences in the UK, and it explicitly left open four questions: who benefits and who loses from such gaming; how its costs can be assessed against the possible benefits of reclassification used as a flexibility-enabling workaround; which categorical finessing counts as acceptable creative compliance rather than unacceptable gaming, and which formal or informal mechanisms limit or reverse it; and whether gaming of this kind can be compared internationally, and if so how. The problem is open.

Background

Goodhart's Law — named after the monetary economist Charles Goodhart's observation that a statistical regularity tends to break down once the measured quantity becomes a target of policy — is used in public administration to describe the tendency of high-consequence administrative numbers to be gamed out of meaningfulness. 'Gaming' here follows the source paper's definition: creative accounting or finessing of administrative numbers that stops somewhere short of clear-cut illegality. A closely related term, 'creative compliance', denotes exploiting the letter of accounting or legal rules to defeat their purpose while remaining formally legal. The public-management literature had previously documented gaming on the output side of public services, where performance indicators such as hospital waiting-time targets reward effort substitution and misreporting (Bevan and Hood 2006), and on the macro side of fiscal policy, where governments subject to deficit and debt rules engage in 'fiscal gimmickry' — for example, creative compliance with the EU Stability and Growth Pact, often detected through stock-flow adjustments, the discrepancy between the change in public debt and the reported deficit (Alt, Lassen and Wehner 2014). Hood and Piotrowska (2020) identified a third, previously little-studied locus: the input side of public expenditure planning and control at the meso level. 'Meso-level input numbers' are the figures for categories of spending within the aggregate control total — as opposed to the macro totals governed by fiscal rules or the micro performance indicators used for service delivery. Their UK case studies showed that the central mechanism of such gaming is creative categorization: because new spending categories (protected budgets, cash versus non-cash spending, on- versus off-balance-sheet treatment) are created to improve control, actors can strategically assign units of spending to categories so that reported amounts for 'desirable' or 'undesirable' categories are over- or under-stated. The documented cases included 'tuck-unders' (shifting spending into protected budget lines), a Ministry of Defence reclassification of non-cash budget as near-cash that released spendable resources, and Private Finance Initiative (PFI) contracts — public-private partnership deals whose debt was kept off the public balance sheet — with the state's notional-private holding of English student loan debt noted as a further case. The paper concluded that the amounts at stake ranged from hundreds of millions to tens of billions and that creating new spending categories is a two-edged sword, since each new categorization opens new gaming opportunities. What the paper established is thus an existence proof and mechanism description; it explicitly did not assess the distributional incidence, the net costs and benefits, the legitimacy boundary, or the cross-national comparability of the phenomenon — the four linked questions that constitute this problem.

Problem Statement

For meso-level public expenditure input numbers — figures for categories of spending within the control total, of the kind documented for the UK by Hood and Piotrowska (2020) — answer the four questions that the paper's documentation of creative categorization left open, treating them as one linked assessment-and-governance objective: (1) Distributional effects: who benefits and who loses from gaming of expenditure numbers and its Goodhart's Law effects — in political terms (which ministries or interests gain budgetary advantage), administrative terms (which agencies gain usable cash), and policy terms (which service users experience sustained resource changes)? (2) Cost-benefit assessment: by what empirical method can the costs of such gaming be assessed against its possible benefits, notably its role as a 'workaround' that enables flexibility or smooths unavoidable timing mismatches, taking in the accountability, transparency, and fiscal-sustainability consequences of contaminated reported numbers? (3) Legitimacy and constraint: who sees which sorts of categorical finessing as acceptable rather than unacceptable gaming, and which formal or informal social, legal, or audit mechanisms actually serve to limit or reverse such gaming? (4) Comparability: can gaming of meso-level public expenditure input numbers of this type be compared internationally, and if so how — through what standardized indicators, protocols, or taxonomies that separate true policy choices from tactical gaming? An answer must address the phenomenon in the source's own generality (classification-based gaming of spending inputs in a developed public financial management system) and must not silently substitute the macro-level fiscal-rule compliance literature for it.

The four sub-questions are posed jointly, as one linked assessment-and-governance objective. The parenthetical lists inside (1)–(4) name the dimensions that assessment should cover; they are not additional conjunctive requirements.

References

  1. Hood, Christopher, and Barbara Piotrowska (2020). 'Goodhart's Law and the Gaming of UK Public Spending Numbers.' Public Performance & Management Review 44(2), 250-271. DOI: 10.1080/15309576.2020.1749092. https://doi.org/10.1080/15309576.2020.1749092 (source paper; first published online 7 April 2020, print issue dated March 2021)
  2. Bevan, Gwyn, and Christopher Hood (2006). 'What's Measured is What Matters: Targets and Gaming in the English Public Health Care System.' Public Administration 84(3), 517-538. DOI: 10.1111/j.1467-9299.2006.00600.x. https://doi.org/10.1111/j.1467-9299.2006.00600.x
  3. Alt, James, David Dreyer Lassen, and Joachim Wehner (2014). 'It Isn't Just about Greece: Domestic Politics, Transparency and Fiscal Gimmickry in Europe.' British Journal of Political Science 44(4), 707-716. DOI: 10.1017/S0007123414000064. https://doi.org/10.1017/S0007123414000064
  4. Hood, Christopher, and Barbara Maria Piotrowska (2023). 'Who loves input controls? What happened to "outputs not inputs" in UK Public Financial Management, and why?' Public Administration 101(1), 303-317. DOI: 10.1111/padm.12741. https://doi.org/10.1111/padm.12741 (first published online 22 June 2021)
  5. Hood, Christopher, Maia King, Iain McLean, and Barbara Maria Piotrowska (2023). 'Public Spending by Other Means?' In The Way the Money Goes: The History of UK Public Expenditure Management. Oxford University Press, 63-86. DOI: 10.1093/oso/9780198865087.003.0004. https://doi.org/10.1093/oso/9780198865087.003.0004
  6. Maltritz, Dominik, and Sebastian Wüste (2024). 'Creative Accounting and Fiscal Rules in EU Member States: An Analysis Based on Stock Flow Adjustments.' Review of Economics 75(2), 163-191. DOI: 10.1515/roe-2024-0031. https://doi.org/10.1515/roe-2024-0031
  7. Bilmes, Linda J. (2025). 'The Ghost Budget: U.S. War Spending & Fiscal Transparency.' Daedalus 154(4), 87-105. DOI: 10.1162/daed.a.943. https://doi.org/10.1162/daed.a.943
  8. Baekgaard, Martin, Carlos X. Lastra-Anadón, Søren Serritzlew, and Kim Mannemar Sønderskov (2024). 'Gaming Over: Quasi-Experimental Evidence on the Effect of Competition on Gaming.' Public Performance & Management Review 47(1), 89-113. DOI: 10.1080/15309576.2024.2302389. https://doi.org/10.1080/15309576.2024.2302389
  9. Ji, Suho, and Sounman Hong (2025). 'Hidden Costs of Performance Management: When Performance Feedback Encourages Gaming and Dysfunctional Behaviors.' Public Performance & Management Review 48(4), 768-792. DOI: 10.1080/15309576.2025.2486061. https://doi.org/10.1080/15309576.2025.2486061
  10. Grøn, Caroline Howard, and Mads Bøge Kristiansen (2022). 'What Gets Measured Gets Managed? The Use of Performance Information across Organizational Echelons in the Public Sector.' Public Performance & Management Review 45(2), 448-472. DOI: 10.1080/15309576.2022.2045615. https://doi.org/10.1080/15309576.2022.2045615