1. How Robust and Innovative are Illegal Drug Markets?

Illegal drug markets are ubiquitous in the Western world, despite 40 years of moderate to rigorous enforcement against them.  How have the markets changed in recent years and what have been the drivers?

Drug markets are characterized by small producers, and stagnant technology, perhaps reflecting the difficulty of attracting skilled, highly educated individuals to activities that are risky, both in terms of the risk of arrest and physical dangers.  Illegality also hampers management which cannot make use of the kinds of technology that might expose them to enforcement and which also is forced to small span of control to limit their personal risk.

In a few Latin American nations, drug markets are a leading source of violence.  This reflects a conjunction of weak state control, high levels of corruption and, in most cases, the fact that the source of demand is international.  In the rest of the world, the levels of violence in drug markets are relatively modest, given the scale of the markets themselves.  They do though serve to immiserate some low-income communities both through the attraction of drug selling relative to legitimate labour force opportunities and the disorder that accompanies street markets.

Tougher enforcement has rarely eliminated an established drug market.  The few successful instances of major disruptions, such as the Australian heroin drought of 2000 and the cutting of US cocaine consumption by 50% between 2006 and 2010, have yielded few insights for enforcement. 

No institution has yet created the capacity to forecast drug markets’ response to economic development or political instability.  Studies of, for example, drug prevalence or drug-related health problems, have failed to find any consistent predictors or indeed evidence of the effectiveness of most policy interventions.  I conclude with suggestions for how to strengthen understanding of the consequences of supply reduction interventions