The cobra effect: When good intentions bite back

Picture colonial Delhi, a city under British rule, plagued by a slithering, venomous problem: an abundance of cobras. Fearing for public safety, the government announced what seemed like a brilliant, simple solution: a cash bounty for every dead cobra.

Initially, the policy was a roaring success. Dead snakes piled up, and rewards were paid out. Administrators in their high-collared tunics likely congratulated themselves on their approach to pest control. But then, a strange thing happened. The cobra population was not declining. In fact, the treasury was paying out more rewards than ever.

It turned out that incentives had met human ingenuity. Enterprising locals realised that if killing cobras earned money, breeding them could be even more profitable. Makeshift snake farms sprang up. People began raising cobras in their backyards, killing them, and collecting the rewards—a perfect, perverse business model.

When the outraged authorities finally discovered the scheme, they cancelled the bounty. And then came the final twist. The breeders, now holding cages full of worthless, venomous snakes, did the only practical thing: they set them free. The result? Delhi was left with even more cobras.

This is the cobra effect: a well-meaning solution that backfires due to a poorly planned incentive, making the original problem worse. It is a tough lesson in unintended consequences, where the very tool meant to fix an issue ends up fuelling it. Several historical examples illustrate the principle. In French colonial Hanoi, authorities offered a bounty for each rat tail submitted to combat an infestation. Soon, officials noticed rats in the city with no tails. Rat catchers were simply catching them, snipping off the tail for the bounty, and releasing the rodents back into the sewers to breed, ensuring a steady income. During China's Four Pests campaign in the 1950s, the government declared sparrows an enemy for eating grain. The population was mobilised to exterminate them. The unintended consequence? With their primary predator gone, the locust population exploded, contributing significantly to a devastating famine. The goal was to protect the harvest; the result was destruction.

This global phenomenon has clear and costly parallels in Bangladesh, where numerous policies, launched with the best of intentions, have been haunted by the same flawed logic. In 2010, driven by pressing energy shortages and global climate goals, the government mandated that new buildings must install rooftop solar panels to get a grid electricity connection. The noble goal was to boost renewable energy. However, what the government incentivised was not "production of solar energy"; it was "getting a grid connection."

Building owners complied. Many installed the cheapest, lowest-grade panels possible, often without proper installation or inverters. Once the connection was secured, these systems were often neglected. Today, reports suggest 80-90 percent of these mandated systems are non-functional, gathering dust and turning into e-waste. A regulatory hurdle was cleared, but the green energy goal was lost.

Similarly, to boost foreign exchange and support industrial growth, Bangladesh offers generous cash incentives on export proceeds, particularly for garments and food. The goal is to encourage legitimate trade. The incentive, however, has encouraged widespread fraud.

This has given rise to "phantom exports"—fictitious shipments where documents are forged to claim subsidies for goods that never left the country. Between 2017 and 2021, dozens of companies reportedly laundered over Tk 300 crore through such ghostly consignments, often with alleged complicity from officials. The incentive designed to build the economy is, in some cases, actively draining it by rewarding the paperwork of exporting, not the actual economic value.

To ensure food security and keep rice prices stable, the government heavily subsidises chemical fertilisers. This makes fertiliser cheap. The result? Farmers, ignoring soil tests and expert recommendations, often apply 2-3 times the recommended dose, especially of urea.

This over-application has led to diminishing returns, with rice yields plateauing despite rising fertiliser use. Worse, it poisons the land. Excessive nitrogen depletes soil organic matter, increases acidity, and threatens drinking water. The subsidy, meant to secure the food supply, is degrading the very soil it depends on. This creates a dangerous long-term dependency, where future food security may rely on importing ever-larger quantities of chemical inputs simply to maintain yields on depleted land.

There are lessons in these backfires for those who listen: (i) humans follow the reward, not the intention, and they are masters at finding shortcuts to reward. If a loophole exists, it will be found and exploited. (ii) The metric is not the mission. When you reward a proxy, people will optimise for that proxy, not the actual goal. The goal in Delhi was "fewer live cobras," but the metric was "more dead cobras." This error is everywhere: in education, it leads to "teaching to the test" rather than genuine learning; in business, it leads to hitting sales quotas rather than building customer value. (iii) A policy never does just one thing. A solution is often an intervention in a complex system, and it will create ripples. Ignoring these "second-order effects" is the most common path to failure. Wiping out sparrows does not just mean fewer sparrows; it means a new, bigger problem with locusts. Policymakers must always ask: "and then what happens?"

How can policymakers avoid this cobra effect? The lessons from these failures point to a clear path forward: (i) game the system first. Before launching a policy, ask the most cynical questions: "how could this be cheated? What's the laziest, most corrupt way to get this reward?" This "red teaming" or pre-mortem analysis can reveal fatal flaws before they go live. (ii) Reward the real goal. Design incentives that are tightly aligned with the outcome you want, not the activity you think will get you there. Do not reward dead cobras; reward a verifiable drop in the live cobra population. Do not reward installing solar; reward producing solar energy. (iii) Test, Learn, and Adapt. Pilot policies on a small scale. See what strange behaviours emerge. Treat the initial rollout as an experiment, not a final declaration. Be humble enough to admit a plan is backfiring and change course quickly.

Ultimately, the cobra effect is a powerful lesson in humility. It reminds us that when we try to change a complex system—whether it is an ecosystem, an economy, or a company culture—we must be prepared for the system to alter our plans in ways we never anticipated.

Hussain A Samad is a consultant at the World Bank in Washington, DC, and an independent researcher. He can be reached at hsamad2000@yahoo.com.

Views expressed in this article are the author's own. 

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