The Cobra Effect: Risk and Audit Assessment can Assist

The Cobra Effect refers to a story from British India. The authorities faced a problem of an uncontrollable increase in cobras. The solution implemented was to incentivize the public to kill cobras by offering a bounty on each dead one. This resulted in people breeding cobras for increased incentives which ultimately resulted in abandoning the program. Many newly harvested cobras were released into the wild making the problem bigger.

The moral of the story: The Cobra Effect refers to the unintended negative consequences of an incentive that was designed to improve a process, society, or individual well-being or a situation where the solution to a problem ends up being worse than the problem itself. (sometimes may be referred to as risk homeostasis).


Can you think of any examples in your space?


Stay proactive and anticipatory folks.

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