BUSTING DRUGS WHILE PAYING
WITH CRIME: The domestic cost of
America’s drug control policy in
foreign countries
By
Horace Bartilow
Kihong Eom
The University of Kentucky
Department of Political Science
Abstract
The existing literature on America’s drug control policy towards drug
producing countries in Latin America contend that US policy has
helped to create a political environment that has facilitated a
significant rise in narco related violent crime, acts of terror against the
state, and has destabilized the region in ways that foster the growth of
the drug trade. But what effect does America’s drug control policy;
specifically, drug interdiction and the immobilization of drug traffickers
have on narco related violent crime in Central American and Caribbean
countries who serve as strategic drug transit zones in the global drug
industry? We answer this question by empirically analyzing drug crime
data for Caribbean and Central American countries from 1984 to 2000
using two different estimation procedures. The first is a time series
cross-section model and the second is a simultaneous equation model.
After controlling for variables that affect overall crime the results show
that increasing levels of drug interdiction and the immobilization of
drug traffickers contributes to increasing levels of drug related crime
in the Caribbean basin. These results suggest that US drug control
policy may have the unintended effect of destabilizing the sociopolitical systems of Central American and Caribbean countries –
important allies in America’s drug war and could ultimately discourage
governments in the region from future cooperation with core aspects
of US drug control policy.
The Relationship between Drug
Trafficking and Violent Crime
In the major drug consuming countries in
the world such as North America and
Western Europe, it is now conventional
practice to refer to a tripartite classification
scheme of psychopharmacological effects,
economic compulsive drives, and
systematic violence to identify the
relationship of drugs to violent crimes
against people and property (Goldstein
1985; Tullis 1995).
The Relationship between Drug
trafficking and Violent Crime (contd)
The psychopharmacological dimension
relates to people becoming irrational,
agitated, impulsive, uncontrollably anger
and physically abusive even to the point of
committing murder. The economic
compulsive dimension is associated with
violent criminal acts to obtain money for
personal drug consumption (e.g. through
burglaries and robberies).
The Relationship between Drug
trafficking and Violent Crime (contd)
The systematic dimension relates to drug cartels,
gangs, narco-insurgents and traffickers
protecting their product or turf from lawenforcement officials, or from each other by
resorting to extreme forms of violent behavior.
The psychopharmacological and economic
compulsive dimensions relates to violent crimes
by drug abusers while the systematic dimension
relates to violent crimes by cartels and
traffickers.
American Drug Control Policy
Since violence is an integral part of the
drug industry’s operation, American policy
makers contend that US drug control
policies; specifically, the interdiction of
illicit drugs and the immobilization or arrest
of drug traffickers is an effective means of
reducing drug related violence in the
global war on drugs (Reuter and Kleinman
1986).
American Drug Control Policy (contd)
American drug control policy is informed by the
logic that the reduction of the supply of drugs will
increase market prices in the US and as a result
US consumers will therefore forgo drug
consumption and drug abuse thereby reduce
the likelihood of violent crime. By this logic,
efforts to reduce domestic drug consumption in
the US have led American policy makers to seek
cooperation and collaboration with foreign
countries in the areas of interdiction and
trafficker immobilization (Toro, 1992).
American Drug Control Policy (contd)
To ensure foreign country cooperation in the ‘war on
drugs’, the Reagan administration increased diplomatic
pressure on drug producing and drug transit countries
and strengthened the capacity of the US to impose the
extraterritoriality of its criminal laws throughout the
Western hemisphere. As a result, the administration
introduced the Anti-Drug Abuse Act of 1986 and the
priority of narcotics issues was, for the first time,
placed on the international agenda. The US government
developed a ‘certification’ practice to evaluate the
performance of foreign country cooperation in the drug
war.
American Drug Control Policy (contd)
The Anti-Drug Abuse Act made US
financial assistance, positive votes within
multilateral lending institutions and trade
preferences conditional on foreign
governments’ cooperation against drug
trafficking (Perl, 1989; United States
Senate, 1988b).
Existing Research and US Drug Control
Policy
Students of US drug control policy towards drug
producing countries in Latin America have
consistently noted that US policies have
increased the level of drug related violent crime
in the region. These scholars argue that by
implementing US drug policies in the region,
American policy makers have frequently
introduced US military forces into countries like
Bolivia, Columbia and Peru to battle traffickers at
the source of their operations.
Existing Research and US Drug Control
Policy (contd)
For example Operation Blast Furnace - the
intervention of U.S forces to destroy cocaine
laboratories in Bolivia and the introduction of US
military personnel to battle Narco-insurgents in
Columbia and Peru. Consequently, American
policy has militarized the region and facilitated
an escalation of the drug related violence –
primarily kidnappings, assassinations and the
spread of narco-insurgent violent confrontations
against governments in the region (Bagley 1992;
Crandall 2002; Labrousse and Laniel 2001;
Lupsha 1996; Tokatlian 1994).
The Limits of Existing Research
The problem with this line of argument is that the
causal inference - namely, that US drug control
policy has facilitated the escalation of drug
violence in Latin America - is not convincing. The
counterfactual is that even in the absence of US
drug control policies, drug related violence
would most likely increase due to the fact that
illicit drugs are largely produced in Latin
American countries and traffickers would
naturally utilize violence against each other and
against governments in the region in order to
expand and protect their enterprise.
The Limits of Existing Research (contd)
Essentially, existing studies are unable to separate the
level of drug violence that is endemic to countries that
produce drugs from the reported enabling affects of US
policies towards the region. A more systematic approach
would be to estimate the impact of US drug control
policies on drug violence in Central American and
Caribbean countries who serve as transit zones and not
drug producers, and where drug cartels like Cali and
Medaine or narco-insurgents groups like FRAPH in
Columbia and the Shining Path in Peru are not
indigenous to the political landscape of these countries.
In this way much of the drug related violence that is
endogenous in existing country specific studies can be
avoided.
The Central Argument
1. The only way in which US drug control policies specifically drug interdiction – could effectively
reduce crime is if we make the assumption that
the demand for drugs is elastic. However, given
the psychopharmacological addictive nature of
drug abuse, we argue that the demand for drugs
is inelastic. And therefore drug interdiction under
conditions of demand inelasticity will increase
drug related violence by drug users (the
economic compulsive dimension) and by drug
traffickers (the systematic dimension).
Figure. 1.
The Effects of Drug Interdiction on Drug Price
when Demand is Elastic
S2
9
S1
8
D
7
6
P2 = 5.5
5
4
P1 = 3.5
3
2
S2
S1
D
1
1
2
3
Q2
4
5
6
Q1
7
8
9
Figure. 2.
The Effects of Drug Interdiction on Drug Price
when Demand is Inelastic
S2
D
S1
9
8
P2 = 7
7
6
5
P1 = 4
4
3
2
1
S2
1
S1
2
3
4
D
5
Q2 Q1
6
7
8
9
The Central Argument (contd)
2.The Immobilization of drug traffickers will most
likely increase drug related violence due to the
fact that traffickers will be replaced at a higher
rate than the level of arrests. In fact the
immobilization of drug traffickers may be
counterproductive to the goal of reducing crime.
Given the strong financial rewards of the drug
industry, the removal of one trafficker merely
opens up opportunities for another to enter. And
new recruited traffickers are likely to commit
more violence as a way of consolidating their
position as they move deeper into the industry
(Spellman, 1994; Spellman, 2000).
The Central Dependent Variable
The Drug Crime variable measures the
volume of drug related crime (homicides
and robberies) per 1000 persons for the
Caribbean and Central American countries
in our data set. The data is collected from
various issues of the International Crime
Statistics published by INTERPOL.
Central Explanatory Variables
1. Drug interdiction is measured in terms of the
interdiction of cocaine and marijuana and is
calculated by dividing a country’s yearly seizures
of cocaine and marijuana in kilograms by the
yearly number of a country’s active law
enforcement personnel. The drug interdiction
data was collected from various issues of the
International Narcotics Control Strategy Report
and from the Organization of American States
(OAS): the Inter-American Drug Abuse Control
Commission (CICAD). The law enforcement
personnel data was adopted from various issues
of The Military Balance (Institute for Strategic
Studies, 1984 - 2000).
Central Explanatory Variables (contd)
2. Trafficker immobilization measures the yearly
number of drug arrest of people convicted of
drug trafficking. This data was also collected
from various issues of the International Narcotics
Control Strategy Report and from the
Organization of American States (OAS): the
Inter-American Drug Abuse Control Commission
(CICAD).
Confounding Variable
Number of Drug Users
We control for a host of variables that
theoretically predict general crime and drug
crime in particular. These include: the number
of drug users in the Caribbean basin. Since the
psychopharmacological and economic
compulsive dimensions of drug related crimes
relates to violent crimes committed by drug
abusers – its is expected that increasing
numbers of drug users is expected to increase
drug related crime (Goldstein 1985; Tullis
1995). This data was also collected from
various issues of the International Narcotics
Control Strategy Report.
Confounding Variable
Distance from the US
Drug trafficking is as much about the covering
distance as it is about acquiring wealth. Since
the Caribbean basin serves as a major transit
point for drug traffickers, it is expected that
countries that are geographically closer to the
US will be more exposed to drug trafficking than
those that are further away and will therefore
have higher incidence of drug related violent
crime. Our distance variable was collected from
Direct-Line Distances, U.S Edition (Gary L.
Fitzpatrick and Marilyn J. Modlin, 1986)
Confounding Variables
Unemployment
The rate of unemployment is traditionally used
as a control variable in many criminological
studies of crime. It is argued that high levels of
unemployment increase the level of crime in
general and drug related violent crime in
particular,since the unemployed will be drawn to
the lucrative drug industry (Ehrlich, 1973;
Chaiken and Chaiken, 1982; Spelman, 2000).
This variable was collected from the World
Bank’s World Development Indicators 2001.
Confounding Variables
Economic Growth
Economic growth is also a conventional
control variable used in many
criminological studies of crime. High levels
of economic growth is expected to reduce
general crime and drug related crime in
particular. (Bruce D. Johnson, Andrew
Gloub and Eloise Dunlap, 2000). This
variable was collected from the World
Bank’s World Development Indicators
2001.
Confounding Variables
Total External Debt
High levels of external debt encourage people in
developing countries to export illicit drugs to rich
drug consumers in the developed countries
(George,1992). Since indebtedness decrease
personal disposable income – drug consumption
and drug related violent crime will decrease as
well. Therefore it is expected that the level of a
countries total indebtedness will have a negative
impact on drug violence. This variable was
collected from the World Bank’s World
Development Indicators 2001.
Confounding Variables
US Drug Consumption/per street Value
It is important to control for the effects of US
drug consumption on drug crime in the
Caribbean basin. Since Central American and
Caribbean countries serve as drug transit zones
for markets in North America, increases in US
drug consumption drives up profits for trafficking
gangs and increase the likelihood for systematic
violent crime between them. This variable is
calculated by dividing the yearly consumption of
drugs in the US by the average street price. This
data was collected from the 2000 issue of the
Office of National Drug Control Policy.
Estimation Model 1: Assumes an
Exogenous Relationship between Drug
Control Policy and Drug Crime
We analyze drug crime data for Caribbean and
Central American countries from 1984 to 2000 via
the following time series cross-section equation:
Drug Crimeit = 0 + 1Drug Seizureit + 2Drug
Arrestit + 3Drug Usersit + 4Distanceit +
5Unemploymentit + 6Economic growthit +
7External Debtit + 8Illicit Drug consumption per
priceit + it
The Estimation method is OLS with panel corrected
standard errors assuming V(it) = 2i and COV(it, jt)
≠ 0 where i ≠j.
Model 2: Assumes an Endogenous
Relationship between Drug Control Policy
and Drug Crime
Our argument is that drug interdiction increases drug crime.
However, it is plausible that increases in drug crime would
force governments to interdict drugs. And since replacement
theory predicts that the immobilization or arrest of traffickers
increase drug crime, its is also possible that increases in drug
crime would lead to the arrest of drug traffickers. In other
words, drug interdiction (cocaine and marijuana seizures) and
the immobilization of drug traffickers are endogenously
related to drug crime. Instrumental variables are generated to
predict drug interdiction (cocaine and marijuana seizures) and
drug arrest. These instruments are placed into the statistical
model that predict Drug Crime via the following Three
Stage Least Least Square Structural Equation:
Model 2: Three Stage Least Square
Structural Equation Model of Drug Crime
1) Drug Crime1it = 10 + 11Marijuana Seizureit +
12Cocaine Seizureit + 13Drug Arrestit + 14Drug Usersit
+ 15Distanceit + 16Unemploymentit + 17Economic
growthit + 18External Debtit + 19 US Drug
consumption per priceit + 1it
2) Drug Arrest2it = 20 + 21Drug Arrestit-1 + 22Drug
Crimeit + 23Marijuana Seizureit + 24Cocaine Seizureit +
25Distanceit + 26Drug Usersit + 27Unemploymentit +
28Economic growthit + 29External Debtit + 210 US
Drug consumption per priceit + 211 US Marijuana
Consumptionit + 212Money Launderingit + 2it
Model 2: Structural Equation Model of Drug
Crime (Contd)
3) Marijuana Seizure3it = 30 + 31Marijuana Seizureit-1 +
32Drug Crimeit + 33Drug Arrestit + 34Neighboring States’
Effortit + 35US Bilateral Drug Interdiction it + 36Total Coast Line
(Km) of CB Countries it + 37CB Countries Distance from the US
3 South American Drug Seizures + 3 Per-capita purchasing
+

it
8
it
9
3
power parity in CB Countries it +  10US per-capita purchasing
power parity it + 311Government Corruption in CB Countries it +
312Domestic Illicit Drug Consumption in CB Countries it +
313Domestic Illicit Drug Consumption in the US it +
314Economic Trade Openness of CB Countries it + 315Individual
Political Freedom and Civil Liberties in CB Countries it +
316Institutional Political Openness in CB Countries it + 317US
Aid to CB Countriesit + 3it
Model 2: Structural Equation Model of
Drug Crime (Contd)
4) Cocaine Seizure4it = 40 + 41Cocaine Seizureit-1 + 42Drug
Crimeit + 43Drug Arrestit + 44Neighboring States’ Effortit + 45US
Bilateral Drug Interdiction it + 46Total Coast Line (Km) of CB
Countries it + 47CB Countries Distance from the US it + 48South
American Drug Seizures it + 49Per-capita purchasing power parity in
CB Countries it + 410US per-capita purchasing power parity it +
411Government Corruption in CB Countries it + 412Domestic Illicit
Drug Consumption in CB Countries it + 413Domestic Illicit Drug
Consumption in the US it + 414Economic Trade Openness of CB
Countries it + 415Individual Political Freedom and Civil Liberties in
CB Countries it + 416Institutional Political Openness in CB Countries
4 US Aid to CB Countries + 4
+

it
17
it
it
Model 2: Structural Equation Model of Drug
Crime (Contd)
Where superscript indicates equation number, subscript i refer to a
country and subscript t refers to a year. The estimation method is three
stage least squares assuming COV (jit, kit) ≠ 0 where j ≠ k.
RESULTS