# **INTRODUCTION**

Cocaine and heroin are produced in poor countries and exported, _inter alia_ , to consumers in rich countries, where their consumption and sale cause considerable damage in the form of crime, disease, and addiction. The producing nations are then blamed for their failure to control production, accusations that are sharpened by the corruption that is ubiquitous around drug production and by the large rewards that accrue to some developing country players in the trade. While there is increasing acceptance that the fundamental problem for rich countries is their inability to control domestic demand for drugs,<sup>1</sup> the search for ways of controlling production continues, with rich countries both aiding and coercing poor producer nations in their efforts.

The findings on effects of interventions are discouraging. Little of a systematic nature is known about the effects of such programs as interdiction, crop eradication, “alternative development,” or more general law enforcement aimed at reducing drug production and trafficking. The general impression is that such programs have been ineffective. Certainly it is the case that the world drug trade has continued to flourish even as the rhetoric of control has sharpened during the last quarter century and as the flow of funds for suppression has increased.

This paper focuses on cocaine and heroin for two reasons. First, cocaine and heroin are generally believed to account for the bulk of the income that flows to developing countries from illicit drugs, though the evidence is very soft; there are no systematic estimates of the flows from other drugs such as methamphetamines and marijuana.<sup>2</sup> Second, compared to drugs that are more widely used (in particular marijuana), cocaine and heroin produce particularly intense psychological and physical effects on users; cocaine use results in a form of psychological addiction by producing a high that encourages pursuit of more intense intoxication, whereas heroin use produces an actual physical dependence (Kleiman, 1992). For example, opiates account for approximately 70 percent of all treatment demand in Asia, followed by 64 percent in 1 President George W. Bush made such a statement in meeting with President Vicente Fox of Mexico in 2001. “One of the reasons why drugs are shipped—the main reason why drugs are shipped through Mexico to the United States is because United States citizens use drugs. And our nation must do a better job of educating our citizenry about the dangers and evils of drug use.” (Office of the Press Secretary 2001).

> 2 The most systematic effort to produce such estimates is contained in the 2005 _Word Drug Report_ (Chapter 2), prepared by the United Nations Office on Drugs and Crime.  Opium (mostly in the form of heroin) and cocaine are estimated to yield $65 billion and $70 billion in retail sales.  Amphetamine Type stimulants (ATS) yield $44 billion and cannabis resin $25 billion.  For cannabis herb (marijuana) the report cites a figure of $113 billion but concedes this has a weak base; the figure is far higher than can be reconciled with the systematic and well documented estimates for the U.S. marijuana market (ONDCP,

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