Although anatomical studies of the basal ganglia show the existence of extensive convergence and lateral inhibitory connections, physiological studies failed to show correlated neural activity or lateral interaction in these nuclei. These seemingly contradictory results could be explained with a model in which the basal ganglia reduce the dimensionality of cortical information using optimal extraction methods. Simulations of this model predict a transient change in the efficacy of the feed-forward and lateral synapses following changes in reinforcement signal, causing an increase in correlated firing rates. This process ultimately restores the steady-state situation with diminished efficacy of lateral inhibition and no correlation of firing. Our experimental results confirm the model's predictions: rate correlations show a drastic decrease between the input stage (cortex) and output stage (pallidum). Moreover, preliminary analysis revealed that pallidal correlations show a transient increase following discrepancies between the animal's predictions and reality. We therefore propose that by using a reinforcement-driven dimensionality reduction process the basal ganglia achieve efficient extraction of cortical salient information that may then be used by the frontal cortex for execution and planning of forthcoming actions.