International Narcotics Trade, Foreign Aid, and Enforcement

17 Pages Posted: 14 May 2015

See all articles by Reza Oladi

Reza Oladi

Utah State University - College of Business - Department of Economics

John Gilbert

Utah State University - College of Business - Department of Economics

Date Written: July 2015

Abstract

Using a general equilibrium model of a developing narcotics-producing and exporting economy, we analyze the economic effects of policies designed to restrict the production and trade of narcotics: foreign aid tied to anti narcotics law enforcement activities, demand reduction policies, and alternative development policies. We characterize the problem as one of serious factor market distortions introduced by illicit production and enforcement. While aid to enforcement generally reduces the production and export of narcotics, it is less effective for economies with market power, and under plausible conditions may raise narcotics output and have negative welfare implications for the recipient.

JEL Classification: F1

Suggested Citation

Oladi, Reza and Gilbert, John, International Narcotics Trade, Foreign Aid, and Enforcement (July 2015). Economic Inquiry, Vol. 53, Issue 3, pp. 1630-1646, 2015. Available at SSRN: https://ssrn.com/abstract=2605231 or http://dx.doi.org/10.1111/ecin.12183

Reza Oladi (Contact Author)

Utah State University - College of Business - Department of Economics ( email )

3530 Old Main Hill
Logan, UT 84322-3530
United States

John Gilbert

Utah State University - College of Business - Department of Economics ( email )

3530 Old Main Hill
Logan, UT 84322-3530
United States
435-797-2314 (Phone)
435-797-2701 (Fax)

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