Corollary to Problem with Measurement Focus

There is an interesting corollary to my view that the more important something is, the harder it is to measure. That corollary was stated here in an economic context:

There may be less here than meets the eye because of the application of what economists call Goodhart's Law, i.e. once an economic indicator itself becomes the object of policy, it losses the information content which qualifies it as an indicator. In the context of China's goal of maintaining GDP growth of at least 8%, this means that China will misallocate capital and pursue sub-optimal policies just to hit that target. This results in asset bubbles and wasted resources in the long-run.

These distortions are common in management as well. Engineers spend all of their time copying receipts for expense reports and filling out time cards, while the company lurches towards bankruptcy.