Perverse incentives? Conflict of interest?

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I just received a request to referee a paper. I accepted (electronically) because the editors of the journal in question are good friends, and I want to help them whenever I can.

But after accepting, I got access to the paper, and I found that the author cited me.

In our brave new world in which one's value as a scholar is judged by "metrics," I now have a strong motivation to approve publication of this paper, since the value of one's own publications is often judged by how often they are cited. I hope I can avoid evaluating the paper based on the fact that "Hey, here is someone who cites me: they should be published!" But can I really do so? I don't know.

And note: I was asked to referee in this case precisely because I was cited in the paper in question: since I was cited, I must know something about the topic being discussed.

I only bring this all up to point out that the peer-reviewed system is far from perfect.
I have no better suggestions as to what other system could be put in its place, but we really ought to stop worshiping at the altar of "peer review."

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