Econ 101

Konstantin Kisin- The Cobra Effect: Why Good Intentions Don’t Solve Problems

The Cobra Effect is based on a story which may or may not have taken place during British colonial rule in India. Despite its unconfirmed authenticity, it remains a powerful illustration of how bad incentives can undermine good intentions. In my view, it should be taught as early as possible to anyone who intends to run, manage or operate any system of almost any complexity.

4 Replies to “Econ 101”

  1. We have some Persians working in our yard.
    I’m told they can’t speak a word of English, but they work hard so who gives a fck.
    Why do they work hard?
    I’m told they want coke and alcohol, just to name 2 incentives.
    I’m sure getting/staying out of Mesopotamia is a lot of incentive as well.

  2. I think it was Margaret Thatcher who said that if you create a department for something, the problem will never go away. However, that may have been on Yes, Minister.

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