Bounties, Grants, and Market-Making Entrepreneurship

In an anecdote originating during British rule of India, colonial leadership sought to reduce the number of cobras-highly venomous snakes-in Delhi by offering a bounty for cobra tails to reduce their supply. Initially, wild cobras were hunted, and all appeared well. When a suspiciously large stream...

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Bibliographic Details
Published inThe independent review (Oakland, Calif.) Vol. 22; no. 4; pp. 507 - 528
Main Authors Lucas, David S., Fuller, Caleb S.
Format Journal Article
LanguageEnglish
Published Oakland Independent Institute 22.03.2018
Subjects
Analysis
Bounties
Commodification
Economics
Entrepreneurs
Entrepreneurship
Grants
Homeless people
Interventionism
Lobbying
Markets
Theory
Vietnam
India
South Africa
Southeast Asia
Israel
United States > US
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Summary:In an anecdote originating during British rule of India, colonial leadership sought to reduce the number of cobras-highly venomous snakes-in Delhi by offering a bounty for cobra tails to reduce their supply. Initially, wild cobras were hunted, and all appeared well. When a suspiciously large stream of tails was redeemed for payment, however, the government discovered that local entrepreneurs were breeding cobras for profit and so immediately disbanded the reward system. In response, the breeders released their cobras, increasing Delhi's serpent population dramatically. The incident is the presumptive basis for the term the cobra effect: instances where government efforts to solve a problem exacerbate it.
ISSN:1086-1653
2169-3420