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The War on Illegal Drug Production and Trafficking: An Economic Evaluation of Plan Colombia

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  • Daniel Mejía

    ()

  • Pascual Restrepo

    ()

Abstract

This paper provides a thorough economic evaluation of the anti-drug policies implemented in Colombia between 2000 and 2006 under the so-called Plan Colombia. The paper develops a game theory model of the war against illegal drugs in producer countries. We explicitly model illegal drug markets, which allows us to account for the feedback effects between policies and market outcomes that are potentially important when evaluating large scale policy interventions such as Plan Colombia. We use available data for the war on cocaine production and trafficking as well as outcomes from the cocaine markets to calibrate the parameters of the model. Using the results from the calibration we estimate important measures of the costs, effectiveness, and efficiency of the war on drugs in Colombia. Finally we carry out simulations in order to assess the impact of increases in the U.S. budget allocated to Plan Colombia, and find that a three-fold increase in the U.S. budget allocated to the war on drugs in Colombia would decrease the amount of cocaine that succesfully reaches consumer countries by about 17%.

Suggested Citation

  • 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.
  • Handle: RePEc:col:000089:005123
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    File URL: http://economia.uniandes.edu.co/publicaciones/dcede2008-19.pdf
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    References listed on IDEAS

    as
    1. Daniel Mejía, 2008. "The War on Illegal Drugs in Producer and Consumer Countries: A Simple Analytical Framework," CESifo Working Paper Series 2459, CESifo Group Munich.
    2. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), 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. Jeffrey A. Miron & Jeffrey Zwiebel, 1995. "The Economic Case against Drug Prohibition," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 175-192, Fall.
    5. Oeindrila Dube & Suresh Naidu, 2010. "Bases, Bullets, and Ballots: The Effect of U.S. Military Aid on Political Conflict in Colombia," Working Papers 197, Center for Global Development.
    6. Gernot Tragler & Jonathan P. Caulkins & Gustav Feichtinger, 2001. "Optimal Dynamic Allocation of Treatment and Enforcement in Illicit Drug Control," Operations Research, INFORMS, vol. 49(3), pages 352-362, June.
    7. Hirshleifer, Jack, 1991. "The Technology of Conflict as an Economic Activity," American Economic Review, American Economic Association, vol. 81(2), pages 130-134, May.
    8. Daniel Mejía & Carlos E. Posada, 2007. "Cocaine Production and Trafficking: What do we know?," BORRADORES DE ECONOMIA 003955, BANCO DE LA REPÚBLICA.
    9. Chumacero, Romulo A., 2008. "Evo, Pablo, Tony, Diego, and Sonny - general equilibrium analysis of the illegal drugs market," Policy Research Working Paper Series 4565, The World Bank.
    10. Juan Carlos Echeverry, 2004. "Colombia And The War On Drugs, How Short Is The Short Run?," Documentos CEDE 002133, Universidad de los Andes - CEDE.
    11. Jeremy Arkes & Rosalie Liccardo Pacula & Susan M. Paddock & Jonathan P. Caulkins & Peter Reuter, 2008. "Why the DEA STRIDE Data are Still Useful for Understanding Drug Markets," NBER Working Papers 14224, National Bureau of Economic Research, Inc.
    12. C. Peter Rydell & Jonathan P. Caulkins & Susan S. Everingham, 1996. "Enforcement or Treatment? Modeling the Relative Efficacy of Alternatives for Controlling Cocaine," Operations Research, INFORMS, vol. 44(5), pages 687-695, October.
    13. Caulkins, Jonathan P. & Hao, Haijing, 2008. "Modelling drug market supply disruptions: Where do all the drugs not go?," Journal of Policy Modeling, Elsevier, vol. 30(2), pages 251-270.
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    Cited by:

    1. Adriana Camacho & Alejandro Gaviria & Catherine Rodríguez, 2010. "El consumo de droga en Colombia," Documentos CEDE 007607, Universidad de los Andes - CEDE.
    2. Daniel Mejia & María José Uribe & Ana María Ibáñez L., 2011. "An evaluation of the Macarena Integral Consolidation Plan (PCIM)," Documentos CEDE 008742, Universidad de los Andes - CEDE.
    3. Gerson Javier Pérez V., 2012. "Goals Met or Just Empty Promises? First Version of the Democratic Security Policy in Colombia," BORRADORES DE ECONOMIA 009408, BANCO DE LA REPÚBLICA.
    4. Blanco Mariana & Vargas Juan F., 2014. "Can SMS Technology Improve Low Take-up of Social Benefits?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(1), pages 61-81, January.
    5. Mejia, Daniel & Restrepo, Pascual, 2016. "The economics of the war on illegal drug production and trafficking," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 255-275.
    6. Mariana Blanco & Juan F. Vargas, 2010. "Empowering IDPs with SMS: A Randomized Controlled Trial in Bogota," Research Department Publications 4704, Inter-American Development Bank, Research Department.
    7. Laura Atuesta & Geoffrey J.D. Hewings, 2013. "Economic Welfare Analysis Of The Legalization Of Drugs: A Cge Microsimulation Model For Colombia," Economic Systems Research, Taylor & Francis Journals, vol. 25(2), pages 190-211, March.
    8. King Yoong Lim & Diego Morris, 2019. "Modeling the drugs and guns trade in a two-country model with endogenous growth," NBS Discussion Papers in Economics 2019/01, Economics, Nottingham Business School, Nottingham Trent University.
    9. Antonio Bojanic, 2014. "The effect of coca and FDI on the level of corruption in Bolivia," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 23(1), pages 1-23, December.
    10. Juan Carlos Muñoz-Mora & Santiago Tobón-Zapata & Jesse d'Anjou, 2014. "Does land titling matter? The role of land property rights in the war on illicit crops in Colombia," HiCN Working Papers 168, Households in Conflict Network.
    11. Gerson Javier Pérez V., 2012. "Plan Colombia’s Onset: Effects on Homicides and Violent Deaths," Borradores de Economia 746, Banco de la Republica de Colombia.
    12. Juan David Prada-Sarmiento, 2010. "Uncertainty in conflicts," Documentos CEDE 007713, Universidad de los Andes - CEDE.
    13. Ibanez, Marcela & Martinsson, Peter, 2013. "Curbing coca cultivation in Colombia — A framed field experiment," Journal of Public Economics, Elsevier, vol. 105(C), pages 1-10.
    14. Daniel Mejía, 2008. "The War on Illegal Drugs in Producer and Consumer Countries: A Simple Analytical Framework," CESifo Working Paper Series 2459, CESifo Group Munich.
    15. Leonardo Raffo López, 2010. "Narcotráfico y conflicto: ¿por qué bajó el precio de la cocaína?," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 12(23), pages 229-258, July-Dece.
    16. Leonardo Raffo López & José Luis Segura, 2018. "La ineficacia de las políticas de represión a la oferta de drogas: una explicación alternativa," Ensayos de Economía 016782, Universidad Nacional de Colombia Sede Medellín.
    17. Leonardo Raffo López & José Luis Segura, 2015. "Las redes del narcotráfico y sus interacciones: un modelo teórico," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 17(32), pages 183-212, January-J.
    18. Marcela Ibanez & Juanita Vasquez, 2016. "Can we fight drugs using communication campaigns? A framed field experiment," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 199, Courant Research Centre PEG.
    19. repec:eee:wdevel:v:103:y:2018:i:c:p:268-283 is not listed on IDEAS
    20. Juan Camilo Castillo, Daniel Mejia, and Pascual Restrepo, 2014. "Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War - Working Paper 356," Working Papers 356, Center for Global Development.

    More about this item

    Keywords

    Hard drugs; conflict; war on drugs; Plan Colombia;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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