At the time of British rule of colonial India, the British government was concerned about the number of venomous cobra snakes in Delhi and so it offered a bounty for every dead cobra. The policy initially appeared successful. Eventually, however, the number of dead cobras being presented for bounty payment began to increase over time and it was discovered that people began to breed cobras for the income. When the government became aware of this, the reward program was scrapped, causing the cobra breeders to set the now-worthless snakes free. As a result, the wild cobra population further increased. The apparent solution to the problem made the situation even worse.
Hence, the Cobra effect is when an attempted solution to a problem makes the very problem worse. The root of the cause is often applying too linear thinking to the problem while neglecting the effect of feedback loops. The model shows that simplistic policies can come back to bite you.