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The War on Illegal Drugs in Producer and Consumer Countries: A Simple Analytical Framework

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  • Daniel Mejía

Abstract

This paper develops a model of the war against illegal drugs in both producer and consumer countries. The paper studies the trade-off faced by the government of the drug consumer country between prevention policies (aimed at reducing the demand for drugs) and enforcement policies (aimed at reducing the production and trafficking of drugs), and shows how the optimal allocation of resources between these two alternatives depends on the key parameters of the model. We use available data for the war on drugs in Colombia, and againstconsumption in the U.S., to calibrate the unobservable parameters of the model, such as the price elasticity of demand for cocaine; the effectiveness of prevention and treatment policies; and the relative effectiveness of interdiction efforts.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2008/wp-cesifo-2008-11/cesifo1_wp2459.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2459.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2459

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Related research

Keywords: war on drugs; conflict; enforcement; prevention and treatment policies; Plan Colombia;

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References

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  1. Cláudia Costa Storti & Paul De Grauwe, 2007. "Globalization and the Price Decline of Illicit Drugs," CESifo Working Paper Series 1990, CESifo Group Munich.
  2. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer, vol. 7(2), pages 283-290.
  3. Herschel Grossman & Daniel Mejía, 2008. "The war against drug producers," Economics of Governance, Springer, vol. 9(1), pages 5-23, January.
  4. Gary S. Becker & Kevin M. Murphy & Michael Grossman, 2006. "The Market for Illegal Goods: The Case of Drugs," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 38-60, February.
  5. Daniel Mejía & Carlos E. Posada, 2007. "Cocaine Production and Trafficking: What do we know?," BORRADORES DE ECONOMIA 003955, BANCO DE LA REPÚBLICA.
  6. Hirshleifer, Jack, 1991. "The Technology of Conflict as an Economic Activity," American Economic Review, American Economic Association, vol. 81(2), pages 130-34, May.
  7. Daniel Mejía & Pascual Restrepo, 2008. "The War on Illegal Drug Production and Trafficking: An Economic Evaluation of Plan Colombia," HiCN Working Papers 53, Households in Conflict Network.
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Cited by:
  1. Lenin Arango Castillo, 2011. "Tráfico de drogas, políticas de disuasión y violencia en México," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 26(2), pages 157-185.
  2. L. Leoncini & F. Rentocchini, 2010. "Counteracting cocaine production. An analysis based on a novel dataset," Working Papers 693, Dipartimento Scienze Economiche, Universita' di Bologna.

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