In response to 'deep's long comment from yesterday:
Funny you should mention 'incentives.' Been reading 'Freakonomics,' have you? I'm not sure what you mean by that but, especially for GP, essay questions clearly do not reward unthinking regurgitaion of material. The nature of the exam itself encourages "understanding and interpretation" of the materials pertaining to the subject, so the problem isn't the exam per se.
I think a lot of it is the way we're brought up to study. Memorizing from a book actually looks like you're studying -- giving assurance to your ever-watchful parents that you aren't wasting your time socializing with friends, watching TV, or whatever other thing you would rather be doing than reading and re-reading a bunch of nonsense words. The incentive is that your parents won't nag at you. The disincentive is having to participate in a family drama.
Why do people forget what they "studied" immediately after their paper? Memorization is baby food: a melange of pre-chewed, pre-digested thoughts we have no claim of ownership to. It's essential for a baby to get started on solid food, but not very substantial for grown people like ourselves. Memorizing stuff is much easier to swallow than having to acquire, think about, analyze, verify and apply it, which is what you're required to do at your level. If you've done the work in hunting, preparing and chewing the food for yourself, you're more likely to remember what it was. If you're given mush to eat, what it actually was will forever be a mystery to you.
Memorizing stuff is reassuring to ourselves as well. There's a certainty to the material we memorize. It must be right, therefore we must memorize it. Conversely, we memorized it, therefore it must be right. But if we actually thought about the material, we risk doubting it and then we have to go through an ardous process of having to discover the truth for ourselves. That's a scary way to prepare for an exam, but that's what learning is.
Again, I'm not saying memorization isn't important, but it is overemphasized in our study culture much to our detriment. We lack entrepreneurs because risk aversion is so deeply ingrained in us from young, but that's the least of our problems. A people that relies on memorization without questioning and understanding the material first is a people easily "brainwashed," to use a term our students so like to use, to do the bidding of others.