The Cobra Effect

1. Incentive creates a market — the bounty transforms "cobra" from a public nuisance into a private asset 2. Supply responds to price — entrepreneurial actors enter when the bounty exceeds the cost of production 3. Quantity rises — breeding for slaughter produces more cobras than existed in the wild 4. Removal collapses the market — when the bounty stops, breeders exit and release stock, instantly inflating the wild population

The failure mode is structural, not accidental: any time you pay people to do something they would not naturally do, you create a class of actors whose income depends on the problem persisting. The perverse effect is not a bug — it is the predictable output of rational economic behavior given the incentive structure.

Canonical case: colonial British India offered a bounty for dead cobras, intending to reduce the wild cobra population. Instead, entrepreneurs bred cobras for the reward. When the program was scrapped, breeders released their stock — dramatically increasing the wild cobra population beyond its original level.