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Jul 12, 2019 in Review

Unintended Consequences of Drug Prohibition

“War on Drugs” is a multi-year global American campaign of drug trade and use prohibition. The efficiency of this policy is debatable and its methods are often criticized. The reasons of such reaction are not only the unsolved problem of the drug use but also the numerous unintended negative consequences which have appeared as a result of this campaign. Each of them is rather serious; therefore “War on Drugs” needs the detail economic analysis of its costs, results, and consequences for development the alternative politic models, which could minimize the damage of drug production and supply. 

Drug prohibition is a factor that destabilizes national security and a reason of international impoverishment, violence, and corruption. Firstly, it weakens developing countries by growing the drug crops in their territory and plotting the routes for drug transportation across them. Theroux (2014) considers “War on Drugs” as a cause of humanitarian crisis in Central America. As a result, Honduras, El Salvador, and Guatemala have the highest homicide rates in the world (respectively number one, four, and five). Due to life-threatening conditions, thousands of people from the countries of Central America become refugees. 

Inhibition of drug production is considered as an effective method which helps attain both anti-narcotic and counterterrorist goals. This prerequisite has been underlain in the basis of U.S. anti-narcotic policy abroad. Having conducted the fieldwork and analysis, Felbab-Brown (2011) found that in fact, anti-narcotic and counterterrorist policies contradict each other to a large extend. Felbab-Brown (2011) stated that “over the past fifty years eradication has not yet bankrupted one single belligerent group to the point of substantially weakening it – not in Colombia, Afghanistan, Peru, Thailand or Burma”.

 
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Liquidation of drug production is complicated since this activity provides employment to a significant part of the population in poor countries. For thousands of people, it is an only mode to earn a livelihood. Sometimes the belligerents bargain with traffickers for better prices in exchange for providing absent public goods and social services. In this way, they get support of the population and make themselves the economic and politic regulators by means of the illicit economy. Felbab-Brown (2011) has also distinguished four factors which determine benefits for belligerents “from their involvement with the illicit economy:  the state of the overall economy; the character of the illicit economy; the presence (or absence) of thuggish traffickers; and the government response to the illicit economy.”

“War on Drugs” strengthens the interrelationships between terrorism, crime, and drugs (Leeson, 2007). The illegal drug industry generates annually about U.S.$380 billion (approximately 8% of the international trade) and terrorists receive the most part of these money. 92% of the world’s opiates are produces in Afghanistan. Their producing, processing, and transporting generate income for The Taliban and Al-Qaeda. About 20-30% of the Al-Qaeda’s profit derives from illegal drugs. The following are the ways in which the drug prohibition weakens the US and strengthens the criminals and terrorists:

  • Drug prohibition stimulates criminals to gain the necessary skill and improve methods of drug trafficking.
  • “War on Drugs” contributes to the financing of the terrorist operations.
  • Prohibition contributes to the criminalization of the law enforcement authorities.
  • Prohibition is a reason of the increase in crime because a large amount of offenses are committed by drug-addicted for a purpose of obtaining drugs. Besides, 85% of the parents in the prison have an experience of drug use. 2-3% of the American children have imprisoned parents. Family breakdowns connected with the imprisonment of the parents because of rising intergenerational poverty and drug abuse.
  • Though the level of drug use does not decrease, vast amounts of money are spent on the drug war annually. In this way, the burden of drug prohibition is born by the American taxpayers.

Drug prohibition damages the US, requiring costs of billions every year. According to Theroux (2014), drug legalization would save not only direct costs of the federal drug war budget (($25.2 billion in FY2014) but also the additional costs of militarizing American police forces, property ruined in botched drug raids, drug gang violence, and imprisonment of non-violent drug-offenders. Drug prohibition costs the US government billions every year. Having counted the annual losses from the “War on Drugs”, Miron and Waldock (2010) state that tax revenues from drug legalization would amount about $46.7 billions annually. Legalization of marijuana would yield approximately $8.7 billions per year, and other drugs - $38.0 billions. 

Miron (2004) in his research concluded that drug prohibition not only requires large monetary expenses but also begets violence by forcing drug markets underground. He highlighted a strong direct correlation between the violent crime rate and drug law enforcement. About three-quarters of drug-related homicides were connected with drug-trade disputes. According to estimates, the end of the “War on Drugs” would reduce the homicide rate in the US by 25-75%. The exploring of the relation between violent crimes and drug prohibition across different countries also shows their correlation. 

Despite the fact that both the possession and distribution of illegal drugs are criminally punished, the government primarily wages a fight with suppliers. According to Powell (2013), its influence is similar to the effect of tax increase in price level. As in the case of tax increase, the main part of the tax burden is imposed on the consumers in the form of growth of prices, so the strengthening of law enforcement measures causes increase in prices on illegal drugs. The demand for drugs has a low level of elasticity, thus rise in prices for drugs reflects insignificantly on the decrease in the quantity of their demand. The effect of a supply-side drug war is illustrated in Figure 1. 

“War on Ddrugs” shifts the line of the supply upwards on the price scale because of the increased difficulty of the import and distribution of the illegal drugs. As a result, the price rises from the mark P1 to P2, and the level of demand decreases from Q1 to Q2. The main effect of a supply-side drug war appears in the insignificant reduction in the consumption of drugs and essential growth of income of the drug dealers. Thereby, instead of the expected drop in the level of drug use, the result is the financing of the drug suppliers that considerably strengthens their positions. 

Powell (2013) also stated that the policy of drug prohibition considerably aggravates the harm from drug use. Firstly, for minimizing the risk of drug discovery during transportation, drug dealers try to make them as light and small as possible, thus increasing their potency. Secondly, the difference between the more-potent and less-potent drugs reduces because the price of evading law enforcement while transportation and distribution does not depend on drug potency. Therefore, drug prohibition essentially contributes to increase in demand of the more-potent drugs. Similar effect took place during alcohol prohibition, when demand for drinks of high potency increased as a result of change in the price.

Illegality of drugs affects their quality deterioration. When selling bad-quality product, drug dealers do not risk losing their reputation in the market. Consumer rights are not protected by law; therefore, consumer can not sue drug suppliers for producing drugs of low quality. Moreover, drug prohibition increases the number of deaths from a drug overdose because drug purchases become more potent and unpredictable. In the period from 1971 to 2007, when Richard Nixon declared “War on Drugs”, the rate of deaths from an overdose increased tenfold.

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When exploring the impact of drug prohibition on the public health, it is important to note the debatable issue of the legalization of medical marijuana. Research of Anderson, Rees, and Sabia (2015) has been conducted with the aim of finding the relation between medical marijuana laws and suicides. 90% of people who are inclined to commit suicide suffer from a mental or substance use disorder. The results of the research have shown that usage of the medical marijuana reduces suicide rate in 5%. It is associated mostly with 20-40- year-old males. Assessment of the suicide rate among females is less precise. The researchers have concluded that the advantages of the legalization of medical marijuana exceed its disadvantages for public health.

The conducted research helps distinguish the main unintended consequences of the “War on Drugs”, which has been lasting for decades. First of all, drug prohibition weakens developing countries because drug suppliers have significant benefits from drug production and trafficking cross countries, which do not have strong law enforcement and economic structure. Besides, prohibition increases crime rate and impoverishment of the population not only in poor countries but directly in the United States. In addition, because of the low elasticity of the demand for drugs, a supply-side drug war increases their prices while drug consumption decreases insignificantly. This policy leads to rising incomes of drug suppliers, and as a result, to financing of the criminal structures and terrorism. Moreover, “War on Drugs” is associated with a row of the factors which pose a serious threat to the public health. The ineffective policy costs the US government billions of dollars annually, at potential losses of tax revenue. During the last decades, drug prohibition was ineffective and caused negative consequences, therefore, the concept of the drug war needs a further review and changes.

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