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The growth of a clandestine drug industry is largely determined by the social structure of the country argues Francisco Thoumi, from the Latin American and Caribbean Center, Florida International University. Policies and direct interventions can only achieve moderate success if fundamental issues of social structure, and the role and function of the state remain un-addressed. The case of Colombia illustrates how policies derived from the international drug control system can produce perverse outcomes. Interventions at one stage in the coca production/trafficking chain only create incentives elsewhere.
Anti-Drug Policies and the Competitive Advantage in Illegal Drugs

Francisco Thoumi

I. Introduction

During the last three decades there has been a “war on drugs” waged in many parts of the world. In the Andean countries, the Golden Triangle, Pakistan and Afghanistan illegal drugs have conditioned their international relations and have been a main government policy concern. In these countries the illegal industry has been linked to political subversion, violence and many pervasive social ills. To understand those countries’ participation in the illegal drug economy and to evaluate anti-drug policies it is necessary to understand the bases of their competitive advantage in illegal drugs. This short essay is an extremely compact summary of the results of extensive work on the illegal drugs industry mainly in Colombia and the Andean countries.[1] For this reason, most references are made to the Colombian situation.

II. The Competitive Advantage in Drugs

In order to understand the development of the illegal drug industry, to evaluate current policies and to determine whether it is possible to formulate and implement successful polices, two central questions must be answered: first, why do some countries produce illegal drugs while others do not? And second, why does a country produce illegal drugs at some periods in time and not at others?
Poverty, inequality, economic crises and state corruption are the most frequently mentioned causes for the development of the illegal drug industry. The relationship between these variables and the illegal industry cannot be supported empirically. Most coca farmers are poor, yet not all participate in illegal activities. Most poor countries can but do not cultivate illegal crops. In Colombia, Bolivia and Peru there is no correlation between peasant poverty levels and illegal crops, some large coca farmers are financially at ease, and many participants in illegal manufacturing and smuggling have relatively high levels of education and could have sought employment alternatives in the legal economy.

During the 1980s, when illegal drugs grew at a fast pace in Colombia, the measures of inequality and poverty actually declined and the standard of living of most Colombians increased. During the 1980s Colombia was the only country in Latin America and the Caribbean to escape the external debt crisis faced by the region[2]. There is no doubt that poverty and crises create incentives for illegal behavior, but we cannot derive from them a one-to-one relation.

The causality between corruption and illegal drugs is also questionable.  A quick look at the Corruption Perceptions Index elaborated by Transparency International shows the difficulty of correlating illegal drugs and corruption. For example, Ecuador tends to be perceived as more corrupt than Colombia and has not been a significant player in the drug industry.

Profitability is considered as another essential motivation behind illegal drugs’ production. A careful look at the geographical distribution of the world’s illegal drugs industry leads to an interesting paradox: the search for profit can explain why a particular individual participates in the illegal business, but it does not account for why some countries produce illegal drugs and others do not.

Legal economic activities and the illegal drugs industry are similar in their search for profit, but the illegality of cocaine, heroin and other psychoactive drugs introduces significant differences.

A cursory look at licit agriculture production employing little capital, well known technologies, needing neither scarce skills nor a location near its demand or input supply sources, reveals that resource availability determines whether a country can produce them. And the list of countries that have that capacity to produce, does indeed overlap almost perfectly with the producer country list.

In contrast to licit goods, virtually all countries can produce and traffic in illegal drugs, and launder drug profits, but most do not. This is true for coca, opium poppy, cocaine and heroin. From a purely economic perspective, the narrow geographical distribution of illegal drugs is remarkable since the industry's extremely high profits should provide very strong incentives for their widespread production.

The production of illicit activities requires certain tasks different from those of licit ones: to trade in illegal inputs which must be obtained in the black market; to grow illegal crops; to develop clandestine manufacturing systems; to sell illegal products in the domestic market; to smuggle drugs out of the country; to develop illegal marketing networks abroad; to transfer, launder and invest illegal profits. These tasks require special "illegal skills" used to develop illegal business organizations, social support networks to protect the industry from law enforcement efforts, and contract enforcement and conflict resolution systems within criminal organizations. Finally, it implies the will to break economic laws and regulations and to use violence if necessary. To understand the development of the illegal drug industry it is necessary to explain why a country develops the skills needed to undertake these tasks. This is not easy because there is no consensual paradigm to explain why people break laws.

III. The Causality of Illegal Drugs

Illegal profits promote crime, but other factors also play important roles: social restrictions and attitudes toward crime, and the strength of internalized controls of the citizenry. The effectiveness of law enforcement efforts, the level of discipline that the state can apply, social sanctioning, and the general effectiveness in inculcating internal behavioural constraints on individuals play causal roles, and can be considered structural causes. However, the knowledge about most of these variables, the magnitude and interaction among them are not known and it is impossible to predict the effects of a particular policy. Unfortunately, policy makers and other analysts do not recognize this fact. When policies fail to achieve unrealistic goals, shortcomings are attributed to "lack of commitment or political will," or/and to "corruption". Few underscore the existence of structural constraints in society that make it impossible for policies to succeed even if governments were "committed, had political will and were not corrupt."
The illegal drugs industry can flourish in a social environment characterized by institutions which impose minimal behavioral restrictions, and which tolerate deviant behaviors. In this respect, institutional evolutionary processes are important. Criminal activity responds not only to illegal profits, but also to changes in the institutions that weaken behavioral controls, including those within the state. The Colombian state emerged from the colonial period as an ensemble of geographically isolated regions with a strong individual character and a particular culture, which found political expression in the two political parties which have dominated Colombian politics. In contrast to other Latin American countries, the political parties in Colombia are built form the bottom up. They are organizations of local leaders seeking to influence central government.

This grip on the political machinery by regional elites has left Colombia as the only South American country where lower class grievances have not produced populist or reformist experiments. The drawn out civil war in the 19th and the violencia of the 1940s, were essentially fought so as to gain control of the state, not over social and economic reform.

These multiple processes of regional particularlism, the enduring hold on power by regional elites, chronic use of force for political ends, combined with the absence of a social reform programme, have clearly eroded the legitimacy of the Colombian state. This is reflected in the high level of crime, and the ready instrumentalisation of violence. These conditions are the outcome of historical processes. Conversely, reversing them is also likely to require patience. There is no "silver bullet" type of policy that can squarely eliminate the "drug problem" in the short-run.

Next to the weakness of the state, the particular ethno-social configuration of Colombian society is decisive. In contrast to Bolivia, Peru and Ecuador, the native communities in Colombia were weaker and did not generate social behavioural constrains in the peasant populations. The largest Colombian native groups were weak enough to be exploited by the Spanish colonizers, but organised enough to survive as a community.

The determining role played by social structure in fostering illegal activity does not exclude other factors. Variables such as extreme poverty, lack of social mobility channels, inequality and economic crises do play a role. They can be considered as latent causes that in most cases, and most of the time, do not result in the development of illegal economic activities. Extreme poverty in and of itself is not a determining cause. Many poor societies or social groups are not characterized as prone to high crime rates. However, when the social structure slackens, it does become a trigger for the development of the illegal industry.

IV. Drug Policy Implications

Because the growth of the illegal drug industry is caused by structural changes in a society that have weakened social and state controls, the effectiveness of repressive anti-drug polices is overestimated. These shortcomings need not necessarily lead to an abandonment of policy, only that expectations should be reasonably lowered. It should be stressed that the long-term solution to the “drug problem” is a structural one that requires significant changes in society, not simple short-term policies.
Illegal drug policies have been designed to lower the industry’s profitability. At best, they have succeeded in making illegal drugs unprofitable at particular locations. Anti-drug policies use a carrot and stick approach. Alternative development (AD) represents an incentive, while repressive policies such as various forms of interdiction, destruction of the industry’s productive infrastructure, anti-money laundering measures, asset seizure and the capture and incarceration of drug actors constitute the policies’ coercive aspect. These policies are formulated on the implicit assumption that social structure does not determine or has scant bearing on policy effectiveness and that they can work in every society if there is “political will” to enforce them. Such expectations are unrealistic and that strategy will not eliminate illegal drugs without a profound change in the social structure.

Anti-drug policies encounter many obstacles. First, at the social level, prerequisites for success include strong communities that generate social behavioral constraints, as well as a strong accountable state that controls its territory and responds to the citizenry’s needs. Second, policies confront technical limitations of various kinds. The effectiveness of aerial fumigation, for instance, requires the use of pesticides against which peasants cannot devise protective methods. Third, many policies work at cross-purposes. Anti-drug policies aim at achieving an economic incongruence: to maximize retail drug prices while minimizing coca and opium poppy prices. Thus, many policies increase economic incentives for illegal activities at other stages of the production and trafficking networks, undermining other policies.

Policy effectiveness depends on the context in which they are introduced. Colombian coca and poppy growing regions are often located in areas where communities are very weak. In many of these settlements, peasants have been displaced there by violence, and are armed. In most these areas there is virtually no state presence and concrete power often lies in guerrilla and paramilitary groups. The Amazon basin soils are very poor which makes it technologically impossible to harvest sustained agricultural production different from coca. Many coca-growing areas are very distant from markets and infrastructure is badly lacking.

Aerial fumigation is implemented only because of the lack of territorial control by the state. Fumigation is an indiscriminate weapon that can impact non-targeted crops and its effectiveness is reduced by weather conditions and/or by protective measures taken by peasants. Lack of coordination between fumigation and AD authorities has undermined the latter’s projects. Replanting makes fumigation less effective than desired and leads to persistent spraying. The long-term health and environmental effects of this policy in one of the most fragile ecosystems of the planet are worrisome. “State presence by fumigation” increases resentment against the government and undermines any other of its activities in those communities.

Interdiction’s effects depend on what element is targeted in the production-trafficking chain. Sealing coca and poppy growing areas lowers crop prices and has less disruptive effects than fumigation on peasant communities. Interdicting finished cocaine and heroin at export ports, has the opposite effect. If traffickers estimate that e.g. 15% of their exports are captured, they will then consider seizures as a cost of doing business and proportionally increase their demand to achieve the quantity they want to supply their customers.

Coordination among anti-drug agencies is key to making sure efforts do not cancel each other out. The weakness of state institutions allows parts of the government to act autonomously in ways that may neutralize other agencies’ actions.

The effects of current programs on democratic development are important. Alternative Development (AD) together with Local Governance (LG) programs, when implemented in organized communities offer an opportunity to strengthen democracy. AD/LG can promote community organization through physical infrastructure, education and other investments always in consultation and negotiation with local partners. AD/LG projects must be predicated on the assumption that eradication sustainability requires strong community bonds able to enforce crop bans. These organizations have to be representative and organized from the bottom up to genuinely reflect community values and interests.

A successful anti-drug strategy may use some traditional policies, but it should also be grounded on the awareness that success depends on the strengthening the state so that it can enforce its policies, and the community so that it develops social controls. These caveats underscore the necessity of a long-term approach to complement short-term measures. This is problematic since political governance has a strong short-term bias for quick results. For this reason, effective anti-drug policies should be state and not government policies.

A strong state should not be a blunt efficient authoritarian machine but one with increased legitimacy and community acceptance. Local governments need to improve their response to the citizenry instead of a few local rich or influential people. Any state strengthening program should be complemented with the development and strengthening of grass roots organizations able to express citizens’ priorities and demand accountability. In other words the long-term policy should have these two components to ensure stable democracy, promote bridging social capital and develop social behavioral controls.

Only a combination of a strong state and democratic community institutions will guarantee the success of anti-drug policies. Some traditional short-term policies should be continued, but they should be implemented having in mind their effects on the necessary changes in society to achieve long-term sustainable success. Thus, they should be implemented with extreme care since they can backfire in the long run. They should be applied as temporary measures while long-term solutions develop.


Thoumi, Francisco E.:
“Illegal drugs in Colombia: from illegal economic boom to social crisis,” The Annals of the American Academy of Political and Social Science, June 2002a.

El Imperio de la Droga: Narcotráfico, Economía y Sociedad en Los Andes, Instituto de Estudios Políticos y Relaciones Internacionales (IEPRI)-Editorial Planeta, Universidad Nacional de Colombia and Planeta Editorial 2002b. An English version, Illegal Drugs, Economy and Society in the Andes will be published by the Woodrow Wilson International Center for Scholars in 2003.

[1] The interested reader is encouraged to look at the detailed work developed in Thoumi (2002a and 2002b).
[2] The good performance of the Colombian economy was due to its conservative macroeconomic management and not to the illegal drug revenues (Thoumi, 2002b).


This article has been kindly allowed for publication on Mama Coca by DRUGLINK.

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