The Law of Unintended Consequences Strikes Again
Economists love to tell each other stories about perverse incentives. The “cobra effect” is a favourite. It describes an attempt by the British Raj to rid Delhi of its cobras by paying a bounty for each cobra skin, thus encouraging a thriving cobra-farming industry. The cobra story is probably an urban myth — or a policy wonk’s version of one — but there is more evidence of a very similar scheme for Hanoi’s rats in the early 1900s. Rat tails brought a bounty from the colonial government, and soon enough, the city was crawling with tailless rats who had had their valuable tails clipped before being released to breed.
More here – Tim Harford
