Depends on the league. In the NFL, the bonus structure of the draft has in the past punished teams that ended up with a top three pick, in some respects; you had to pay them like an elite player straightaway, so teams that sucked for 3-4 years in a row would end up with one or two players who failed to meet that standard, and the effects on their cap was destructive.
In the NBA, it adds so much incentive to being awful that 'tanking' (clearing salary and intentionally sucking for at least a couple years) is by far the best way to build a contender. There is very little elite talent, and most of it ends up going with one of the top five picks...Oklahoma City built in this fashion, getting Kevin Durant with the 2nd overall pick in his year, Russell Westbrook 4th overall, and the now-departed James Harden 3rd overall.
In baseball, it's all about managing your draft budget; until this year teams were free to spend as much or as little as they liked, and there is no cap on the bonus given to any player or draft slot, just an entirely-ignored recommendation. Because of how little (relative to average salary) baseball players are paid, there is a huge premium placed on cost-controlled youngsters, such that teams ought to have been spending far more on draft bonuses than they did; a team going absolutely crazy could spend in excess of $20m in draft bonuses, and if that resulted in even two above-average players among the 40+ drafted, the surplus value provided would render that a bargain. And because players' draft position varied depending on their demands -- it wasn't, and still isn't, uncommon for one of the consensus three-best picks to get selected much lower because they're asking for a fortune -- getting a high pick wasn't the biggest concern. Thus, it didn't inherently add competitiveness, as a team with deep pockets could simply outspend the competition...oddly, though, the teams that tended to throw cash around were smaller-market teams that recognized the value to be had.
Now, however, there's a pseudo-cap; teams are only allowed to spend a certain amount, which is based on the recommendation that I mentioned previously. How this will play out remains to be seen, but as a fan of one of those smaller-market teams who were spending big and reaping the benefits, it kinda sucks.