[jseliger]

As a college level instructor, albeit of the grad student variety, I'd tend to agree and wrote a post on the grade inflation issue: http://jseliger.com/2011/04/02/grade-inflation-what-grade-in... . Basically, almost no one has an incentive at the institutional level. Professors are mostly rewarded for publishing; deans and other administrators for keeping students happy or at least not complaining; students and parents want high marks; and employers might want lower grade inflation but have little leverage.

So we get grade inflation. There are virtually zero rewards and many, substantial costs for me as an individual to reduce grade inflation in the classes I teach, and that's true of virtually everyone else.