Jakarta: The infamous Jakarta rat is wanted dead or alive (preferably alive) with a hefty price on its head, as the city outsources its vermin eradication program to the people.

Everyone who lives in the teeming metropolis has a rat story, with the bloated corpses of dead vermin littering footpaths and clogging up sewers.

This week Jakarta Deputy Governor Djarot Saiful Hidayat announced a bounty of 20,000 rupiah ($2) would be offered for every rat captured.

This is a significant amount of money in Indonesia, where about 40 per cent of the population hovers around the international poverty line of $US2 a day.

But the city administration may do well to read up on "the Cobra Effect": when an attempted solution to a problem creates a perverse incentive and actually makes it worse.

The Cobra Effect, a term popularised by German economist Horst Siebert's book of the same title, takes its name from anecdotal reports that a bounty on cobras in Delhi during the British colonial era led to people establishing cobra farms.

Jakarta has budgeted 80 million rupiah ($8000) for the Rat Eradication Movement, as the program is known, with a trial to start later this year.

"Can you imagine 80 million rupiah means 40,000 rats! It's a lot," Mr Djarot told Fairfax Media.

He warned Jakartans not to use air guns or poison when capturing the pests, saying the preferred method was the rat trap. "We will encourage people to capture them alive," he said.

Yet to be discussed was "how we will deal with it afterward, where we will dump the carcass etc".

Mr Djarot said cats were outnumbered by rats in the city.

"The most dangerous ones are the black head rats, because they eat everything such as asphalt, heavy equipment, diesel - they eat them all."

The Jakarta administration became alarmed after receiving information people had contracted leptospirosis - a bacterial infection transmitted by rat urine that can be life-threatening - after being bitten by rats.

"There are growing numbers of rats where there are no predators and rice fields have turned into high-rise buildings," Bambang Sugiyono, the assistant secretary of the Jakarta Administration Office for Governance Issues, told Fairfax Media.

Mr Bambang said the mechanism for the bounty would still need to be worked out.

"But for sure the rats should be caught alive, people are not encouraged to kill them because it would be dangerous for them," he said.

Michael Vann, an associate professor of history at California State University Sacramento, has suggested the Cobra Effect should be called the "rat effect" after a similar scheme had unintended consequences in French colonial Vietnam.

The French offered a bounty for each rat killed after they became alarmed following an outbreak of vermin in Hanoi in 1902.

"Thousands of rat tails are being delivered to the city hall. The French think they're really making a dent into the rat population," Professor Vann told a 2012 Freakonomics podcast on the Cobra Effect.

But a health official discovered a rat farm on the outskirts of Hanoi.

"And the Vietnamese were growing rats, cutting off their tails and bringing them into the city, to the city hall, to collect the bounty," Professor Vann said on the podcast.  

"You know, this is absolutely a disaster in terms of trying to remove rats."

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