The attempted solution to a problem makes the problem worse through unintended consequences.
Economic theory states that you usually get what you incentivize properly. This one is closely related to Goodhart’s Law.
Colonial India had a live cobra problem. So, the government offered a reward for every dead cobra. This worked. Eventually, there are very few live cobras.
But now, the people making money from the incentive had a dead cobra problem. So, the people started breeding cobras just to kill them. This worked.
But then the government caught wind of the scam and eliminated the reward. So, the breeders just released all the captive snakes back into the wild.
And once again, colonial India had a live cobra problem.
Removing older, more polluting vehicles from the road can increase overall emissions due to the environmental cost of manufacturing new vehicles.
Using antibiotics to promote livestock growth can lead to the proliferation of antibiotic-resistant bacteria.
Pay-as-you-throw schemes to encourage recycling and reduce waste can increase illegal dumping.
Traffic congestion taxes to reduce center city traffic can lead to grid-lock in neighborhoods just outside the fee zone.
Solutions to multi-variable and complex problems require rigorous analysis, experimentation, and assessment of consequences and reactions to incentive schemes. Reassessment of data. Adjustments over time. Willingness to change directions. Admission of false starts. Unbiased rethinking. Empathy and kindness. Forgiveness.
What doesn’t work is soundbite-worthy, toggle-switch, single-variable, fist-pumping slogans.
