How does drug policy affect
the illicit drugs market?
Franz Trautmann
Trimbos Institute
www.trimbos.nl
Based on Trimbos/RAND study on
global illicit drugs markets 1998-2007
(ed. Reuter and Trautmann)
Covering:
• Analysis of the operation of the global market for illicit
drugs
–
•
•
•
•
•
•
Cocaine, heroin, marijuana, Amphetamine Type Stimulants
(ATS)
Estimating seize of the market
Estimating economic costs of drug use
What has happened to the market 1998-2007
What were the policies of the period
How did these policies affect the markets
Analysing unintended consequences of drug policy
Outline
• Drug policy 1998-2007:
– Demand reduction
– Supply reduction
• Drug problems 1998-2007:
– Consumption
– Supply
• Unintended consequences
• Policy analysis
General policy trends
• Drug policy expenditures in many countries
increased substantially
• The biggest share of expenditures for supply
reduction
• Measures against production and trafficking
intensified substantially
• Demand and harm reduction measures
intensified and (the latter) spread to more
nations
Drug policy expenditures in four
countries
Demand
reduction
Supply
reduction
Hungary 2000
Total drug
policy
expenditures
€22million
€4 million1
€16 million
Hungary 2007
€40million
€7million1
€30 million
Czech Republic
2002
Czech Republic
2006
United States
20044
United States
20064
The Netherlands
€7 million2
€6 million
€1 million3
€13 million2
€7 million
€6 million3
$13 billion
$5 billion
$7 million
$12 billion
$5 million
$8 billion
€2,185 million
€540 million5
€1,646 million
Convergence of policies: demand
side
• Strong political support for prevention
– Growing emphasis on proven effective programmes
– Few demonstrated programs of even modest
effectiveness
– Many implemented programs ineffective
• Increasing budgetary and political support for
treatment
• OST is spreading
– Even to unlikely countries, e.g. China, Iran
– In 26 of 27 EU Member States
Convergence of policies: demand
side
• Other Harm Reduction measures also spreading
– Syringe Exchange Programs now in many countries
– Even in U.S. though not with federal support
• Reduced willingness to punish drug users
– More decriminalization of drug use, mostly marijuana
– Administrative sanctions for possession of small
quantities for personal use
– Few arrestees are incarcerated
Emphasis on pushing arrested addicts into treatment
Convergence of policies: supply
side
• Increasing toughness towards sellers
• More arrested
• Longer statutory sentences
– Longer actual sentences
• US exceptional in numbers
incarcerated
– European intensity probably one tenth
European arrest figures rising
Drug-law offences / arrests
• In most countries use and possession still
account for majority of arrests
– cannabis offences dominate
• Very few cannabis arrests lead to prison
sentences
Arrests for use/possession and
dealing/trafficking
1998
2005
2,128
2005 Use +
possession
for use
7.8%
2005
Dealing +
trafficking
92.2%
Czech Republic
1,530
Hungary
6,670
7,616
91.7%
8.3%
Netherlands
12,616
20,548
30.9%
68.8%
Portugal
11,395
11,825
52.9%
47.1%
Sweden
11,490
18,844
86.1%
13.9%
Switzerland
63,2201
Turkey
8,360
(2002)
130,643
56,3421
(2006)
13,229
83%
(2006)
48.0%
15%2
(2006)
52.0%
122,459
(2004)
86.4%
13.6%
United
Kingdom
Drug consumption
Western drug use largely stable or declining
• Marijuana prevalence rates among youth
falling
– Some exceptions
• Heroin dependent population aging and
declining
• Cocaine rising in Europe, falling in US
• ATS patterns complex but numbers still
rather small (with some exceptions, e.g. CZ)
US High School Senior Use 19752007
10
Daily marijuana
8
6
4
2
30-day cocaine
0
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
Source: Monitoring the Future
Experimentation with cannabis is
common in Western countries
Total US Cocaine consumption
1988-2000 (in metric tons)
700
650
600
Cocaine
550
500
450
400
350
300
250
200
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Consumption indicators for nonWestern countries are weak
• Cannabis use generally much lower than in US
–
–
e.g. 2005 survey Mexico City: 3.2% of 12-17 year olds report ever using
marijuana
U.S figure 10 times as high
• Heroin use stable except for major epidemic in Russia and
Central Asia
• Cocaine use slight outside of Western countries and a few
in South America
–
Mexico still modest use levels despite its trans-shipment role
• ATS unclear
• Prevalence figures are stabilising in some (advanced)
transitional countries in the past decade.
• Drug use prevalence increased in developing countries.
Supply side changes modest:
opiates and cocaine
• The production of opiates and cocaine is
concentrated in very few countries
–
Afghanistan is by far the main producer of opium, Colombia of coca
• No changes which countries produce, just some
shifts in distribution across countries
Supply side changes unclear
and rather negative: ATS
• ATS production is spread over several countries;
• The number of production countries increased in
past decade;
• New producers: in particular transitional
countries;
• ATS production diverse, from small-scale
kitchen laboratories to large industrial-scale
laboratories;
• Some shifts in quantities produced from
countries with intensified control to countries
with less control.
Supply side changes diffuse
and rather negative: Cannabis
• Cannabis production in more than 172 countries.
• Cannabis resin production more concentrated than
cannabis herb production;
– cannabis resin in 58
– 116 for cannabis herb production.
• Mexico and Morocco only large scale exporters but
account for small share of total consumption
• An increasing number of countries are involved in
cannabis herb production.
• Cannabis herb production takes diverse forms, from
small-scale home growing to large-scale agricultural
business
Supply side changes:
trafficking
• Impact of anti-trafficking measures on
quantities trafficked hard to measure
– Seizures indicator for trafficking routes rather than for
trafficked quantities
• Changes in trafficking routes occur every
few years
– Central Asia heroin trafficking post-1995
– West African cocaine route post-2005
Unintended policy consequences
on drugs market
• Increasing interdiction rates for trafficking may
lead to greater export demand;
• Violence of producers, traffickers, dealers and
users as response to tougher enforcement;
• Large black markets generate incentives for
corruption;
• Environmental and health damage caused by
enforcement induced replacement of big
methamphetamine laboratories by smaller labs
using varying ingredients
Despite supply reduction efforts:
prices have declined, e.g. in EU
US cocaine and heroin prices have
declined
US enforcement up, prices down
450
$700
400
$600
350
$500
300
$400
250
200
$300
150
$200
100
$100
50
$0
0
02
00
98
96
94
92
Heroin Price (Scaled)
20
20
19
19
19
19
90
88
86
84
82
80
Drug Prisoners (Total)
19
19
19
19
19
19
Cocaine Price
Number Incarcerated for Drug Law Violations
(thousands)
500
Retail Price (2002 $/pure gram; divided by 6 for
heroin)
$800
Control efforts have minimal
effect on global drug supply
Examples:
• Increased control efforts not reflected in prices
of illicit drugs, especially in Western countries
• Policy can reduce the nature and location of
harms related to production and trafficking
• Interventions can affect where production and
trafficking occurs
– Balloon effect: control efforts in Peru and Bolivia shift
production to Colombia
– 'Closing' of Netherlands Antilles smuggling route for
cocaine to Europe may have supported West African
route
Drug policy has limited effects on
drug demand
• Drug use is driven by broader social,
economic and cultural factors
• Policy measures can not affect:
– Whether an epidemic starts
– Severity of epidemic
– Prevalence of dependence
• Policy can reduce harmfulness of drug
use
• Drug problems drive drug policy
Selection of 18 countries for detailed
study
Criteria for selecting countries
• Size (China and India)
• Major role in production and/or trafficking (Iran
and Colombia)
• Major consumers (the United States)
• Coverage of all regions of the globe
• Substantial differences in the drugs problem
they face (production, trafficking and use)
• Differences in societal changes during the past
ten years;
– Western
– Transitional
– Developing
Selected countries
Australia
Brazil
Canada
The Netherlands
Portugal
Russia
China
Colombia
Czech Republic
South Africa
Sweden
Switzerland
Hungary
India
Mexico
Turkey
United Kingdom
United States
Principal methodological
issues
• No primary data collection
– Analysed available data sources
–
EMCDDA, UNODC, national studies, expert opinion
• Conceptual challenges:
–
Differences across nations in concepts and terminology (e.g.
problem drug use)
• Empirical challenges:
–
–
–
Data quality (e.g. political interests)
Data scarcity
Data inconsistency (e.g. differences in age groups and periods
covered)
• Data on non-Western countries extremely limited
Production is very low cost