The Cobra Effect

The President of the United States set a tough goal for the American population to become vaccinated against the COVID-19 virus. Early on the American population responded, but the vaccinations stalled as social media sites started posting false information about the vaccines. Pleas to the public went unheeded. Appeals to democratic values were not effective.

One Governor decided to offer an incentive for those who became vaccinated. The incentive was initially savings bonds. These boosted the vaccination rates slightly, but were unlikely to achieve the vaccination goals. Other Governors decided to offer incentives as well. These became more attractive and included lottery winners, college scholarships, etc.

What was unexpected was that vaccinations in states with no incentives virtually stopped. Citizens were waiting for their Governors to implement an incentive. As a result, the COVID-19 pandemic remained a threat especially as new variants threatened those who were not vaccinated.

The vaccine incentives triggered what is called the Cobra Effect, a form of perverse incentive. Cobra Effect incentives have a consequence of making the situation worse. In this case, the vaccination incentives in some states were delaying people from getting the vaccination in other states where incentives were not offered.

The Cobra Effect has been demonstrated in other actions as well. The Great Recession of 2008 was partially attributed to government policies designed to increase home ownership by those who could not meet normal mortgage arrangements. The subprime mortgage market was then manipulated by the financial institutions and the nation’s economy was severely impacted. Other Cobra Effect incentives are prominent in such government policies for involving endangered species, Medicare/Medicaid, and unemployment practices.

How might Cobra Effect consequences be anticipated? Most of the time, these consequences can be anticipated by convening panels with expertise in the area where the incentives are being explored. These expert panels can be joined by typical citizens to identify what they might do as a result of the incentive. There are also analytical processes such as simulations which also can project the consequences of the incentive.

Citizenship should not require incentives. Appeals to citizenship responsibilities should replace incentives whenever possible. As marketing strategies have become more sophisticated, citizen appeals should reduce the need for incentives and the Cobra Effect.

Just imagine how we can use the persuasive power of social media and advertising to create citizenship values? Just imagine how we can reduce the misinformation which is often the origin of the need for perverse incentives? Just imagine how we can turn genuine citizenship into its own incentive?

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“There can be no daily democracy without daily citizenship.” – Ralph Nader

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