yes one of the great conundrums of social sciences (especially economics) is that things that look like they should work well on paper, often do not survive contact with the messy reality of human affairs... then you can goodly two ways: you can modify your theories & philosophies, or (as especially free market economists are tempted to d) you can try to modify human beings (via systems of incentives & persuasion); of course one might say the latter is the art of politics!