in category Economics

What is the cobra effect?

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The cobra effect occurs when an attempted solution to a problem makes the problem worse,as a type of unintended consequence. The term is often used to illustrate the causes of incorrect stimulation in economy and politics.

Where did the term originate?

During the British rule of India, the British Government was concerned about the growing population of Cobras in Delhi. In an attempt to remedy the problem, they placed a high bounty on every dead Cobra turned in.

What seemed like a pretty reasonable decision turned to **** when Indian citizens made a booming business out of breeding preposterous quantities of Cobras to kill for the bounty. The number of Cobras in Delhi skyrocketed.

When the British government heard about what was happening, they scrapped the project and closed the bounties. In return, Indian breeders released the now-worthless venomous Cobras out into the wild, causing their population to explode even further.

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