What is the "wrong pockets problem"?

The wrong pockets problem describes a situation in which the entity that bears the cost of implementing a practice or program does not receive the primary benefit. For example, an effective intervention for high school students at risk of dropping out might ultimately reduce the number of students who end up involved in the criminal justice system. The criminal justice agencies will reap the benefits of this reduction in crime - as will the community - but the entire cost of the program may be borne by the education system. If the costs of the program outweigh the benefits for that entity, it is unlikely to fund it, even if the net benefits for the government (and society) are strongly positive. PFS can help solve the wrong pockets problem by involving a number of stakeholders as outcome payors.