Goodhart's Law: Why Hitting a Benchmark Target Often Misses the Point

Goodhart's Law, rooted in economist Charles Goodhart's 1975 paper on monetary policy, holds that once a measure becomes a target, optimizing the number and improving what it represents become two separate pursuits. The principle gained its popular phrasing from anthropologist Marilyn Strathern in 1997, though it is frequently misattributed to Goodhart alone. Real-world examples span industries: Volkswagen's emissions software passed lab tests while polluting at up to 40 times legal limits on public roads, and a 2005 survey found 78% of financial executives would sacrifice real economic value to report smoother earnings. Schools, hospitals, and support teams exhibit the same pattern — teaching to the test, parking patients outside emergency doors, or closing tickets without solving problems. The distortion is structural rather than intentional, arising whenever those being measured also influence the conditions of measurement.