Quantifying environmental crime and the effectiveness of policy interventions is difficult because perpetrators typically conceal evidence. To prevent illegal uses of natural resources, such as poaching endangered species, governments have advocated granting policy flexibility to local authorities by liberalizing culling or hunting of large carnivores. We present the first quantitative evaluation of the hypothesis that liberalizing culling will reduce poaching and improve population status of an endangered carnivore. We show that allowing wolf (Canis lupus) culling was substantially more likely to increase poaching than reduce it. Replicated, quasi-experimental changes in wolf policies in Wisconsin and Michigan, USA, revealed that a repeated policy signal to allow state culling triggered repeated slowdowns in wolf population growth, irrespective of the policy implementation measured as the number of wolves killed. The most likely explanation for these slowdowns was poaching and alternative explanations found no support. When the government kills a protected species, the perceived value of each individual of that species may decline; so liberalizing wolf culling may have sent a negative message about the value of wolves or acceptability of poaching. Our results suggest that granting management flexibility for endangered species to address illegal behaviour may instead promote such behaviour.