The most honest companies often look like total disasters when you just look at their spreadsheets.
Groups that strictly verify their results 'uncover' more failures than those that don't check. This creates a 'verification paradox' where the most diligent and effective institutions appear to have the worst success rates.
The Verification Paradox: How Checking Makes Commitment Networks Look Worse and Work Better
SSRN · 6444080
Whether someone checks a commitment matters more than what the commitment contains. We analyze 69,847 condition-review observations across 56,515 unique IMF lending conditions in 1,798 programs and find that the dynamics of institutional commitments split into two regimes at a sharp boundary: the moment of verification. Before the promisee checks, conditions stagnate with decreasing hazard rates (Weibull k = 0.37)-73% of conditions are never assessed, and those that survive past the second revie