Understanding Drug Markets And How To Influence Them

Experience has shown that it is extremely difficult for law enforcement agencies to achieve a significant and sustained impact on the overall scale of illicit drug markets. However, there is clear evidence that some enforcement activities can impact on the structure and methods of operation of trafficking organisations at all levels – from production to retail distribution. This review of studies examining the behaviour of drug dealers shows that they do (sometimes unconsciously) adjust their operations in response to law enforcement strategies and actions, but to a large degree continue to pursue the same principles as any legitimate commodity business – setting of margins, and management of risk. Much greater analysis and understanding of market behaviour is needed if the international law enforcement community is to increase its effectiveness in reducing the harms associated with the illegal market in controlled drugs – an important conceptual step would be for strategists to focus more on the harms associated with drug markets (for example, violence and intimidation, or the corruption of public officials), rather than just the overall scale of those markets.

This paper provides a review for policy makers of what is known about the economic structure of illicit drug markets and the business operations of high level dealers operating within it. It is based on interviews with imprisoned drug traffickers and dealers in UK prisons carried out by Matrix Knowledge Group, and also owes a substantial debt to the valuable work done in this field by Peter Reuter, Jonathan Caulkins and Frederick Desroches, amongst others. The paper does not review the harms caused by law enforcement, some of which have been looked at in previous reports. It assumes that the structure of drug markets influences the primary harms arising from drug use (e.g. excess mortality and disease), the violence that is related to drug markets and the opportunity costs of people spending time and money on illicit substances. Some of these harms might be reduced by introducing alternative arrangements for the international regulation of psychoactive substances. These alternative arrangements are not reviewed here. Rather, the aim is to provide policy makers with information on drug markets as a basis for focussing enforcement resources, and devising more effective policies, to reduce the damage done by the trade in illicit drugs.

CONCLUSION Experience has shown that it is extremely difficult for law enforcement agencies to achieve a significant and sustained impact on the overall scale of illicit drug markets. However, there is clear evidence that some enforcement activities can impact on the structure and methods of operation of trafficking organisations at all levels – from production to retail distribution. This review of studies examining the behaviour of drug dealers shows that they do (sometimes unconsciously) adjust their operations in response to law enforcement strategies and actions, but to a large degree continue to pursue the same principles as any legitimate commodity business – setting of margins, and management of risk. Much greater analysis and understanding of market behaviour is needed if the international law enforcement community is to increase its effectiveness in reducing the harms associated with the illegal market in controlled drugs – an important conceptual step would be for strategists to focus more on the harms associated with drug markets (for example, violence and intimidation, or the corruption of public officials), rather than just the overall scale of those markets.