Weak PC's rise in level quickly. That corresponds to not using the total budget. People who max out or spend their entire budget go up in levels slowly. These are very important. In economics, for example, taxes provide incentives and certain disincentives.
Rules do the same thing.
If elves have many powers, then that provides an incentive for more elf characters, especially in combat intensive campaigns. As described above, a good system of costs provides a pretty good set of incentives in a role playing games. In a recent TSR supplement, it was suggested that perhaps non-weapon proficiencies be traded in for weapon proficiencies. This clearly provides an incentive for the dumping of almost all weapon proficienciesin favor of more combat bonueses. This is clearly a bad incentive.