Assessing drug control options for developing nations

1
Assessing drug control options for developing
nations

• Peter Reuter
• University of Maryland and RAND
• April 26, 2006

2
Production and Trafficking Have Broad
Consequences for Development

• Production
• Conflict between farmers and central government
• Regional corruption
• International stigma
• Trafficking
• Violence in the drug trade
• May generate challenge to central government
• High-level, systemic corruption
• Large share of earnings to a few principals
• Increased risk of drug epidemics
• But Mexico, Turkey counter-examples

3
Outline

• Illicit drug trends
• Drug intervention strategies
• Policy implications

4
Most Drug Revenues accrue to distributors in rich
nations

• Global cocaine and heroin retail sales generate
  100 to 150 billion
• Farmers, refiners, local traffickers receive less
  than 2 percent (up to 3 billion), but it is
  locally significant
• In Afghanistan, 2003 drug revenues were estimated
  at 30 of GDP
• International traffickers receive 5-10 percent,
  up to 15 billion
• In Tajikistan, trafficking may add 50 to legal
  GDP

5
Drug Production and Trafficking are Highly
Concentrated

• Afghanistan and Myanmar account for gt90 of world
  opiate production since 1990
• Bolivia, Colombia and Peru only producers of
  cocaine
• Many countries have grown coca in past
• Opiates are shipped primarily through Iran,
  Pakistan, Tajikistan, Turkey, China, Mexico, and
  Thailand
• Cocaine trafficking is concentrated in Mexico and
  Caribbean

6
Drug Abuse Is Concentrated in Certain Regions

• Most opiate abusers in Asia
• 2.5 million in India
• 1-2 million in Iran
• 1 million in China
• 2 million in Russia
• Cocaine abuse is primarily in rich nations
• 5.8 million in the United States
• 1.0 million in the United Kingdom

7
Only A Few Developing Countries Are Strongly
Affected by Illegal Drugs
8
Global Consumption Is Likely to Grow

• Demand for cocaine and heroin is sticky
  downwards
• Drugs spread through epidemics, leaving aging
  cohorts of dependent users
• No nation has quickly reversed a drug-use
  epidemic
• Heroin consumption in rich countries is stable
• Heroin use is growing in some regions
• Russia
• Central Asia
• China
• Cocaine consumption is decreasing in the United
  States, but may be increasing in western Europe
• US decrease illustrates durability of bad
  reputation for a drug

Developing countries face high level of demand
for production and trafficking services
9
Outline

• Illicit drug trends and developing countries
• Drug intervention strategies
• Policy implications

10
Classifying Drug Control Strategies
11
Extensive Evaluation of Treatment Programs

• Methadone maintenance reduces opiate use, HIV
  risks, and crime
• Other substitutes (e.g., buprenorphine,
  naltrexone) very promising
• Evaluations in many nations (e.g., Hong Kong,
  Australia, Sweden, Netherlands)
• Few evaluations in developing countries
• Even in good programs, most patients drop out or
  relapse
• Cocaine treatment programs less strong but have
  substantial short-term effects

12
Weak Evaluations of Prevention Programs

• Predominantly U.S. evaluations, primarily of
  school-based programs for children 12 to 14
• Some experimental programs have had sizeable
  effects on marijuana use
• Longer-term effects not studied
• Does it affect those most likely to become
  cocaine or heroin users?
• Evaluations of implemented programs show little
  or no effect
• Programs may need to be culturally specific

13
Little Known About the Effectiveness of
Supply-Side Controls

• Some interventions have not been empirically
  evaluated
• Eradication
• General economic growth
• Alternative development has been studied only at
  the local level
• No assessment of spillover effects
• Enforcement in source countries likely to have
  little effect on foreign consumption
• Can affect consumption only through price
• Source country programs affect small share of
  retail price

14
Structure of Prices Suggest Limited Effect of
Source Country Controls
15
Very Few Evaluationsof Supply Side Controls

• Even in data and research-rich U.S. few papers
  have estimated effect of tougher enforcement on
  availability and use
• No positive findings on domestic enforcement
• E.g., Kuziemko and Levitt (2003) estimate 10
  higher cocaine price from tripling incarcerations
• Mixed findings on interdiction
• RAND studies pessimistic
• IDA shows positive effects
• UK interest in mid-level markets
• No evaluations yet

16
Outline

• Illicit drug trends
• Drug intervention strategies
• Policy implications

17
Affected Countries Have Narrow Policy Options

• Base of proven programs very slight
• Little generalizability across countries at
  different stages of development
• E.g. drug courts require well integrated criminal
  justice system
• In a few key nations drug control threatens
  national stability
• Difficult domestically to justify further
  immiserating Afghan farmers to meet concerns of
  richer nations

18
International interdependence creates distinctive
problem

• Policies may affect other countries
• Crackdown in one country could shift production
  or trafficking to others, as has happened in
  Andes
• Effects of drug production and trafficking are
  difficult to reverse
• Should the international community pick one
  nation as producer for each drug?
• Minimizes global corruption cost
• Is there an acceptable mechanism for selecting
  the world producer?