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The War on Illegal Drug Production and Trafficking: An Economic Evaluation of Plan Colombia

64 Pages Posted: 14 Oct 2009 Last revised: 13 Dec 2013

Daniel Mejia

Universidad de los Andes, Colombia - Department of Economics

Pascual Restrepo

Boston University - Department of Economics

Abstract

This paper provides a thorough economic evaluation of the anti-drug policies implemented in Colombia between 2000 and 2006 under the so-called Plan Colombia. The paper develops a game theory model of the war against illegal drugs in producer countries. We explicitly model illegal drug markets, which allows us to account for the feedback effects between policies and market outcomes that are potentially important when evaluating large scale policy interventions such as Plan Colombia. We use available data for the war on cocaine production and trafficking as well as outcomes from the cocaine markets to calibrate the parameters of the model. Using the results from the calibration we estimate important measures of the costs, effectiveness, and efficiency of the war on drugs in Colombia. Finally we carry out simulations in order to assess the impact of increases in the U.S. budget allocated to Plan Colombia, and find that a three-fold increase in the U.S. budget allocated to the war on drugs in Colombia would decrease the amount of cocaine that succesfully reaches consumer countries by about 17%.

Keywords: Hard drugs, conflict, war on drugs, Plan Colombia

JEL Classification: D74, K42

Suggested Citation

Mejia, Daniel and Restrepo, Pascual, The War on Illegal Drug Production and Trafficking: An Economic Evaluation of Plan Colombia. Documento CEDE No. 2008-19. Available at SSRN: https://ssrn.com/abstract=1485690 or http://dx.doi.org/10.2139/ssrn.1485690

Daniel Mejia (Contact Author)

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1 No. 18 A - 10
Bogotá, AA4976
Colombia
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HOME PAGE: http://economia.uniandes.edu.co/share/scripts/home/home.php

Pascual Restrepo

Boston University - Department of Economics ( email )

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