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The War on Drugs is Counterproductive, Once Again

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  • Carlos Humberto Ortiz

Abstract

A two-sector general equilibrium model that included drugs as basic goods was relatively successful at explaining the waste of resources that the war on drugs incurs (Ortiz, 2003). Due to the assumption of constant productivity, the model predicted the rise of the drug price with supply repression. Yet Plan Colombia, an unparalleled effort to eradicate drug production in Colombia, had no significant effect on drug prices. In order to correct the model two sources of productivity improvement in the drugs sector are examined. The modified model helps to understand why drug prices have remained stable, why global supply and demand have not diminished, and why coca plantations were spread throughout the nation under Plan Colombia.

Suggested Citation

  • Carlos Humberto Ortiz, 2009. "The War on Drugs is Counterproductive, Once Again," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 71, pages 19-42.
    • Handle: RePEc:lde:journl:y:2009:i:71:p:19-42
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    File URL: https://revistas.udea.edu.co/index.php/lecturasdeeconomia/issue/view/508
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    References listed on IDEAS

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    1. Mauricio Cárdenas, 2007. "Economic growth in Colombia: A reversal of "Fortune"?," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 25(53), pages 220-259, January.
    2. Ortiz, Carlos Humberto, 2010. "The War on Drugs is Counterproductive, Once Again," Revista Lecturas de Economía, Universidad de Antioquia, CIE, January.
    3. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    4. Gary S. Becker & Kevin M. Murphy & Michael Grossman, 2006. "The Market for Illegal Goods: The Case of Drugs," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 38-60, February.
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    Cited by:

    1. Ortiz, Carlos Humberto, 2010. "The War on Drugs is Counterproductive, Once Again," Revista Lecturas de Economía, Universidad de Antioquia, CIE, January.
    2. 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.
    3. Lim, King Yoong & Morris, Diego, 2020. "The economics of the illicit drugs-for-guns trade and growth," Economic Modelling, Elsevier, vol. 91(C), pages 218-232.
    4. Leonardo Raffo López & Javier Andrés Castro & Alexander Díaz España, 2016. "Los efectos globo en los cultivos de coca en la región andina (1990-2009)," Apuntes del Cenes, Universidad Pedagógica y Tecnológica de Colombia, vol. 35(61), pages 207-2036, January.
    5. 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 16782, Universidad Nacional de Colombia Sede Medellín.
    6. Leonardo Raffo López, 2015. "Law enforcement and drug trafficking networks: a simple model," Documentos de Trabajo 13014, Universidad del Valle, CIDSE.

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    More about this item

    Keywords

    Drug war; drug supply; drug demand; supply repression; basic good;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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