The War on Illegal Drugs in Producer and Consumer Countries: A Simple Analytical Framework
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.
|Date of creation:||2008|
|Date of revision:|
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- Mejia, Daniel & Posada, Carlos Esteban, 2008.
"Cocaine production and trafficking : what do we know ?,"
Policy Research Working Paper Series
4618, The World Bank.
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- Daniel Mejía & Carlos Esteban Posada, . "Cocaine Production and Trafficking: What do we know?," Borradores de Economia 444, Banco de la Republica de Colombia.
- 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.
- Daniel Mejía & Pascual Restrepo, 2008. "The War on Illegal Drug Production and Trafficking: An Economic Evaluation of Plan Colombia," DOCUMENTOS CEDE 005123, UNIVERSIDAD DE LOS ANDES-CEDE.
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American Economic Review,
American Economic Association, vol. 81(2), pages 130-34, May.
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- 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.
- Cláudia Costa Storti & Paul De Grauwe, 2007. "Globalization and the Price Decline of Illicit Drugs," CESifo Working Paper Series 1990, CESifo Group Munich.
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