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COMMENTARIES
Commentaries on Pollack et al. (2014) DIMINISHING RETURNS AND GREAT POTENTIAL: A COMMENT ON POLLACK’S & REUTER’S REVIEW ON TOUGHER DRUG ENFORCEMENT AND PRICES Pollack & Reuter [1] make a valuable contribution by synthesizing the literature assessing the relationship between drug enforcement intensity and prices. They find that, while prohibition itself—backed by enough enforcement to make the prohibition meaningful—may push prices up far above the levels we would expect to see under legalization, there is little evidence that further expansions in enforcement achieve much more, at least for established (as opposed to emerging) drugs. In a graph of prices versus enforcement intensity, the plot would jump up to high levels quite quickly, but then increase slowly thereafter. Pollack & Reuter note that the evidence base for these conclusions is weak—not because the research has been conducted badly, but because the problem is difficult to study and funding for drug policy research is skewed towards studying demand-side interventions. They argue that given the certainty of the costs of zealous enforcement—in terms of dollars, incarceration and intrusiveness—the burden of proof is on those who want to preserve tough enforcement, not on those who want to scale it back. The policy stance should be to withhold mass incarceration until it is proven effective, not to incarcerate until its futility has been firmly established. I am highly sympathetic to these arguments. Indeed, Reuter and I have written before about the United States having pushed enforcement beyond the point of diminishing returns [2] and, hence, the potential wisdom of halving drug-related incarceration [3]. It is worth noting, however, that enforcement is a highly heterogeneous collection of activities. The empirical evidence speaks only to the failures of enforcement as practiced in the past, and enforcement has never been optimized to produce the maximal impact on prices. Many police chiefs and other policy makers do not even think in terms of evaluating enforcement based on its effects on prices. For that matter, law enforcement does not always think in terms of efficient production or maximization of social welfare with respect to any objective function, prices or otherwise. It is important not to conclude that all drug law enforcement is necessarily bad or ineffective. If the only choice were to scale up or to scale down all drug law enforcement activities across the board, then I would unhesitatingly prefer to scale it down; but my first choice © 2014 Society for the Study of Addiction
would be sharp cuts only for incarceration, not investigation and prosecution, with the hope of targeting the remaining incarceration more effectively at the worst offenders. As I noted in [4], ‘belief that enforcement against cocaine in the US has reached a region of diminishing returns is not a condemnation of enforcement generally. . . . Rather than a condemnation, I see this diminishing returns argument as freeing law enforcement from the obligation to try to suppress further cocaine consumption by increasing the raw volume of drug enforcement “products” (arrests, convictions, seizures, people incarcerated, etc.). Freed of that burden, enforcement can be more focused, more creative, and ultimately more effective.’ For example, long sentences could be reserved for dealers whose modus operandi includes violence and corruption, with run-of-the-mill dealers receiving much shorter sentences, just long enough to preserve the structural consequences of product illegality. Such ‘twotiered toughness’ would put dealers employing the most noxious business practices at a competitive disadvantage, and thereby displace the market towards forms and operating patterns that impose fewer externalities on society [5]. Operationalizing such ‘smarter enforcement’ strategies may require more police investigation time per arrest than does the current indiscriminate toughness. That is fine; police are less expensive than prisons, both in a financial sense and in terms of social harms. All other things being equal, more prison inmates is bad for society, but more police officers is not. If we change drug enforcement’s goal from driving up prices to controlling the collateral damage created by black markets, we ought also to change the mix of enforcement activities towards greater informationgathering and less warehousing of dealers. When it comes to drug law enforcement, doing less across the board could be more, but altering the mix of enforcement tactics may be better still. Declaration of interests None. Keywords Drug policy, drug prices, incarceration, law enforcement, prohibition, supply. JONATHAN P. CAULKINS
Heinz College’s, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA 15213, USA. E-mail: [email protected] Addiction, 109, 1967–1971
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1968
Commentaries
References 1. Pollack H., Reuter P. Does tougher enforcement make drugs more expensive? Addiction 2014; 109: 1959–66. 2. Caulkins J. P., Reuter P. How drug enforcement affects drug prices. In: Tonry M., editor. Crime and Justice—A Review of Research, vol. 39. Chicago: University of Chicago Press; 2010, pp. 213–72. 3. Caulkins J. P., Reuter P. Reorienting U.S. drug policy. Issues Sci Technol 2006; XXIII: 79–85. 4. Caulkins J. P. Do Drug Prohibition and Enforcement Work? Santa Monica: RAND; 2000. 5. Caulkins J. P., Kleiman M. A. R. Drugs and crime. In: Tonry M., editor. Oxford Handbook of Crime and Criminal Justice. New York: Oxford University Press; 2011, pp. 275–320.
YET ANOTHER DIMENSION OF THE INEFFECTIVENESS OF SUPPLY-SIDE INTERVENTIONS IN ILLEGAL DRUG MARKETS The growing literature on the effectiveness of supply-side interventions in illegal drug markets shows that most measures taken to curb supply (crop eradication, drug seizures, arrests of drug traffickers and dealers, etc.) have very small effects on quantities transacted. The interesting paper by Harold Pollack & Peter Reuter [1] highlights another dimension of this ineffectiveness: the small (or nil) effects of tougher enforcement on drug prices. Although there has been less attention on this dimension, most of the evidence summarized by Pollack & Reuter shows that there is little evidence in support of the proposition that tougher enforcement will increase prices. The lack of good and systematic data on drug prices, let alone of exogenous sources of variation in enforcement measures to identify causal effects, has prevented more and better research on the effects of enforcement against illegal drug markets on prices. The channels through which this apparent inefficiency operates are relatively well identified. Crop eradication in producer countries, for example, are counteracted by drug producers by spraying molasses on crops so that the active ingredient of the herbicide cannot penetrate the foliage and destroy the plant; also, producers use better planting techniques and become more productive to compensate for the losses created by more eradication. In wholesale markets, crackdowns on drug shipments and routes have led drug traffickers to devise more efficient ways to smuggle drugs from producer to consumer countries. In short, one of the most salient collateral effects of tougher enforcement in illegal drug markets is that it incentivizes technological progress among drug producers, traffickers and dealers in order to compensate for the losses created by it. Examples of very creative smuggling techniques abound in Colombia and © 2014 Society for the Study of Addiction
Mexico: from organic synthesis of the cocaine molecule so that shipments cannot be detected by the standard control methods to the use of catapults to hurl large sacks of marijuana and cocaine over the international border between Mexico and the United States. Apart from the lack of good data on drug prices, another important challenge not sufficiently highlighted in the paper is the lack of exogenous sources of variation in enforcement measures in order to be able to identify causal effects. Exogenous policy changes are rare events, sometimes even more so than the willingness of policy makers to allow for randomized interventions. However, in order to have confidence in the estimated effects of enforcement on drug prices, future research should put more emphasis upon rigorous evaluations that take endogeneity issues seriously. This challenge is especially important given the growing evidence that shows that tougher enforcement against illegal drug markets causes more violence [Calderón et al., unpublished, 2–4]. If it is true that the demand for drugs is price inelastic, curbing supply would increase prices more than it reduces quantities, thus increasing drug market revenues and the incentives to use violence to control these rents. Unless increasing prices is not the channel through which tougher enforcement increases violence, this apparent contradiction between the results summarized in Pollack & Reuter and the growing literature on the effects of enforcement against illegal drug markets on violence deserves further exploration. Declaration of interests None. Keywords Drug prices, drug markets, enforcement, interdiction, producer countries, supply-side interventions, violence, war on drugs. DANIEL MEJIA
Associate Professor and Director of the Research Center on Drugs and Security, Universidad de los Andes, Bogotá, Colombia. E-mail: [email protected] References 1. Pollack H. A., Reuter P. Does tougher enforcement make drugs more expensive? Addiction in press 2014; 109: 1959– 66. 2. Castillo J., Mejia D., Restrepo P. Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War. Washington, DC: Center for Global Development WP no. 356, February 2014. 3. Dell M. Trafficking Networks and the Mexican Drug War. Unpublished manuscript. 2011, Harvard University. Available at: http://scholar.harvard.edu/files/dell/files/ Addiction, 109, 1967–1971
COMMENTARIES
Commentaries on Pollack et al. (2014) DIMINISHING RETURNS AND GREAT POTENTIAL: A COMMENT ON POLLACK’S & REUTER’S REVIEW ON TOUGHER DRUG ENFORCEMENT AND PRICES Pollack & Reuter [1] make a valuable contribution by synthesizing the literature assessing the relationship between drug enforcement intensity and prices. They find that, while prohibition itself—backed by enough enforcement to make the prohibition meaningful—may push prices up far above the levels we would expect to see under legalization, there is little evidence that further expansions in enforcement achieve much more, at least for established (as opposed to emerging) drugs. In a graph of prices versus enforcement intensity, the plot would jump up to high levels quite quickly, but then increase slowly thereafter. Pollack & Reuter note that the evidence base for these conclusions is weak—not because the research has been conducted badly, but because the problem is difficult to study and funding for drug policy research is skewed towards studying demand-side interventions. They argue that given the certainty of the costs of zealous enforcement—in terms of dollars, incarceration and intrusiveness—the burden of proof is on those who want to preserve tough enforcement, not on those who want to scale it back. The policy stance should be to withhold mass incarceration until it is proven effective, not to incarcerate until its futility has been firmly established. I am highly sympathetic to these arguments. Indeed, Reuter and I have written before about the United States having pushed enforcement beyond the point of diminishing returns [2] and, hence, the potential wisdom of halving drug-related incarceration [3]. It is worth noting, however, that enforcement is a highly heterogeneous collection of activities. The empirical evidence speaks only to the failures of enforcement as practiced in the past, and enforcement has never been optimized to produce the maximal impact on prices. Many police chiefs and other policy makers do not even think in terms of evaluating enforcement based on its effects on prices. For that matter, law enforcement does not always think in terms of efficient production or maximization of social welfare with respect to any objective function, prices or otherwise. It is important not to conclude that all drug law enforcement is necessarily bad or ineffective. If the only choice were to scale up or to scale down all drug law enforcement activities across the board, then I would unhesitatingly prefer to scale it down; but my first choice © 2014 Society for the Study of Addiction
would be sharp cuts only for incarceration, not investigation and prosecution, with the hope of targeting the remaining incarceration more effectively at the worst offenders. As I noted in [4], ‘belief that enforcement against cocaine in the US has reached a region of diminishing returns is not a condemnation of enforcement generally. . . . Rather than a condemnation, I see this diminishing returns argument as freeing law enforcement from the obligation to try to suppress further cocaine consumption by increasing the raw volume of drug enforcement “products” (arrests, convictions, seizures, people incarcerated, etc.). Freed of that burden, enforcement can be more focused, more creative, and ultimately more effective.’ For example, long sentences could be reserved for dealers whose modus operandi includes violence and corruption, with run-of-the-mill dealers receiving much shorter sentences, just long enough to preserve the structural consequences of product illegality. Such ‘twotiered toughness’ would put dealers employing the most noxious business practices at a competitive disadvantage, and thereby displace the market towards forms and operating patterns that impose fewer externalities on society [5]. Operationalizing such ‘smarter enforcement’ strategies may require more police investigation time per arrest than does the current indiscriminate toughness. That is fine; police are less expensive than prisons, both in a financial sense and in terms of social harms. All other things being equal, more prison inmates is bad for society, but more police officers is not. If we change drug enforcement’s goal from driving up prices to controlling the collateral damage created by black markets, we ought also to change the mix of enforcement activities towards greater informationgathering and less warehousing of dealers. When it comes to drug law enforcement, doing less across the board could be more, but altering the mix of enforcement tactics may be better still. Declaration of interests None. Keywords Drug policy, drug prices, incarceration, law enforcement, prohibition, supply. JONATHAN P. CAULKINS
Heinz College’s, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA 15213, USA. E-mail: [email protected] Addiction, 109, 1967–1971
bs_bs_banner
1968
Commentaries
References 1. Pollack H., Reuter P. Does tougher enforcement make drugs more expensive? Addiction 2014; 109: 1959–66. 2. Caulkins J. P., Reuter P. How drug enforcement affects drug prices. In: Tonry M., editor. Crime and Justice—A Review of Research, vol. 39. Chicago: University of Chicago Press; 2010, pp. 213–72. 3. Caulkins J. P., Reuter P. Reorienting U.S. drug policy. Issues Sci Technol 2006; XXIII: 79–85. 4. Caulkins J. P. Do Drug Prohibition and Enforcement Work? Santa Monica: RAND; 2000. 5. Caulkins J. P., Kleiman M. A. R. Drugs and crime. In: Tonry M., editor. Oxford Handbook of Crime and Criminal Justice. New York: Oxford University Press; 2011, pp. 275–320.
YET ANOTHER DIMENSION OF THE INEFFECTIVENESS OF SUPPLY-SIDE INTERVENTIONS IN ILLEGAL DRUG MARKETS The growing literature on the effectiveness of supply-side interventions in illegal drug markets shows that most measures taken to curb supply (crop eradication, drug seizures, arrests of drug traffickers and dealers, etc.) have very small effects on quantities transacted. The interesting paper by Harold Pollack & Peter Reuter [1] highlights another dimension of this ineffectiveness: the small (or nil) effects of tougher enforcement on drug prices. Although there has been less attention on this dimension, most of the evidence summarized by Pollack & Reuter shows that there is little evidence in support of the proposition that tougher enforcement will increase prices. The lack of good and systematic data on drug prices, let alone of exogenous sources of variation in enforcement measures to identify causal effects, has prevented more and better research on the effects of enforcement against illegal drug markets on prices. The channels through which this apparent inefficiency operates are relatively well identified. Crop eradication in producer countries, for example, are counteracted by drug producers by spraying molasses on crops so that the active ingredient of the herbicide cannot penetrate the foliage and destroy the plant; also, producers use better planting techniques and become more productive to compensate for the losses created by more eradication. In wholesale markets, crackdowns on drug shipments and routes have led drug traffickers to devise more efficient ways to smuggle drugs from producer to consumer countries. In short, one of the most salient collateral effects of tougher enforcement in illegal drug markets is that it incentivizes technological progress among drug producers, traffickers and dealers in order to compensate for the losses created by it. Examples of very creative smuggling techniques abound in Colombia and © 2014 Society for the Study of Addiction
Mexico: from organic synthesis of the cocaine molecule so that shipments cannot be detected by the standard control methods to the use of catapults to hurl large sacks of marijuana and cocaine over the international border between Mexico and the United States. Apart from the lack of good data on drug prices, another important challenge not sufficiently highlighted in the paper is the lack of exogenous sources of variation in enforcement measures in order to be able to identify causal effects. Exogenous policy changes are rare events, sometimes even more so than the willingness of policy makers to allow for randomized interventions. However, in order to have confidence in the estimated effects of enforcement on drug prices, future research should put more emphasis upon rigorous evaluations that take endogeneity issues seriously. This challenge is especially important given the growing evidence that shows that tougher enforcement against illegal drug markets causes more violence [Calderón et al., unpublished, 2–4]. If it is true that the demand for drugs is price inelastic, curbing supply would increase prices more than it reduces quantities, thus increasing drug market revenues and the incentives to use violence to control these rents. Unless increasing prices is not the channel through which tougher enforcement increases violence, this apparent contradiction between the results summarized in Pollack & Reuter and the growing literature on the effects of enforcement against illegal drug markets on violence deserves further exploration. Declaration of interests None. Keywords Drug prices, drug markets, enforcement, interdiction, producer countries, supply-side interventions, violence, war on drugs. DANIEL MEJIA
Associate Professor and Director of the Research Center on Drugs and Security, Universidad de los Andes, Bogotá, Colombia. E-mail: [email protected] References 1. Pollack H. A., Reuter P. Does tougher enforcement make drugs more expensive? Addiction in press 2014; 109: 1959– 66. 2. Castillo J., Mejia D., Restrepo P. Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War. Washington, DC: Center for Global Development WP no. 356, February 2014. 3. Dell M. Trafficking Networks and the Mexican Drug War. Unpublished manuscript. 2011, Harvard University. Available at: http://scholar.harvard.edu/files/dell/files/ Addiction, 109, 1967–1971
