The British colonial government was concerned about the number of venemous cobras in Delhi.
The government offered a bounty for every dead cobra. Initially, this was a successful strategy – a large number of snakes were killed for the reward. However, this led to large-scale breeding (and killing) of cobras for income. On learning this, the government scrapped the bounty programme. The cobra breeders set their now-worthless snakes free, causing the cobra population in the city to further increase.
A similar problem occurred in Hanoi, Vietnam, when the French colonial government created a bounty program for every rat killed. Rewards were offered for the severed tail of a rat. Colonial officials, however, started noticing rats in Hanoi without tails. The bounty hunters would capture rats, sever their tails, and release them back into the sewers tto produce more rats.
The paleontologist G. H. R von Koenigswald offered to pay Javanese locals for each fragment of homonin skulls they could find. He later discovered that the people had been smashing up the skull into smaller pieces to maximise their payments.
In 2002, British officials in Afghanistan offered poppy farmers $700 an acre in return for destroying their poppy crops. This sparked a poppy-crop growing frenzy, with some enterprising farmers harvesting the sap before destroying the plants, thereby getting paid twice for the same crop. The Brits had apparently not learnt their lesson.
History (and the present) is filled with numerous examples of incentives that backfire, leading British economist Charles Goodhart to coin Goodhart’s law – ‘When a measure becomes a target, it ceases to be a good measure.’
Measures are almost never an end in themselves – they are often a means to a different end. Confusing the two can lead to an incentive that backfires.