1. How does drug policy affect the illicit drugs market?
Franz Trautmann
Trimbos Institute

2. 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
What were the policies of the period
How did these policies affect the markets
Analysing unintended consequences of drug policy

3. Outline Drug policy 1998-2007: Drug problems 1998-2007:
Demand reduction
Supply reduction
Drug problems :
Consumption
Supply
Unintended consequences
Policy analysis

4. 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

5. Drug policy expenditures in four countries
Total drug policy expenditures
Demand reduction
Supply reduction
Hungary 2000
€22million
€4 million1
€16 million
Hungary 2007
€40million
€7million1
€30 million
Czech Republic 2002
€7 million2
€6 million
€1 million3
Czech Republic 2006
€13 million2
€7 million
€6 million3
United States 20044
$13 billion
$5 billion
$7 million
United States 20064
$12 billion
$5 million
$8 billion
The Netherlands
€2,185 million
€540 million5
€1,646 million
1. Figure includes expenditures for treatment, harm reduction and other social care.
2. National/federal budget (i.e. not including local/state budgets).
3. Not including the expenditures for the national drug squad which increased from €3,395,000 in
2003 (2002 figures are not available) to €3,757,000.
4. These figures show the executed budget and only include federal expenditures and exclude some
major items, in particular the costs of prosecution and imprisonment. It is usually assumed that
state and local governments spend as much as the federal government. Total national
expenditures, dominated by enforcement, are probably around $35 billion.
5. Figure includes expenditures for prevention, treatment and harm reduction.

6. 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

7. 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

8. 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

9. European arrest figures rising
The trends represent the available information on the national number of reports for drug law offences (criminal and non-criminal) reported by all law enforcement agencies in the EU Member States; all series are indexed to a base of 100 in 2001 and weighted by country population sizes to form an overall EU trend; the figures between brackets refer to the total number of offences as reported in 2001 (before weighting).

10. 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

11. Arrests for use/possession and dealing/trafficking
1998
2005
2005 Use +
possession for use
2005 Dealing +
trafficking
Czech Republic
1,530
2,128
7.8%
92.2%
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
56,3421
(2006)
83%
15%2
Turkey
8,360
(2002)
13,229
48.0%
52.0%
United Kingdom
130,643
122,459
(2004)
86.4%
13.6%
1. Drug use offences, including cases linked with dealing and/or trafficking
2. 2% for ‘unknown offences’

12. 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)

13. US High School Senior Use 1975-2007

14. Experimentation with cannabis is common in Western countries

15. Total US Cocaine consumption 1988-2000 (in metric tons)

16. Consumption indicators for non-Western countries are weak
Cannabis use generally much lower than in US
e.g survey Mexico City: 3.2% of 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.

17. 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

18. 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.

19. 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

20. 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

21. 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

22. Despite supply reduction efforts: prices have declined, e.g. in EU
The trends represent the available information on national street-level prices (either typical or mean prices, depending on countries and data available) for each drug in the EU Member States and Norway, weighted by country population sizes to form an overall EU trend. Prices have been adjusted for national inflation rates (base year 2001) and all series indexed to a base of 100 in 2001.

23. US cocaine and heroin prices have declined

24. US enforcement up, prices down

25. 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

26. 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

27. 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

28. Selected countries Australia The Netherlands Brazil Portugal Canada
Russia
China
South Africa
Colombia
Sweden
Czech Republic
Switzerland
Hungary
Turkey
India
United Kingdom
Mexico
United States

29. 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

30. Production is very low cost