BUSTING DRUGS WHILE PAYING WITH CRIME: The domestic cost of Americas drug control policy in foreign

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BUSTING DRUGS WHILE PAYING WITH CRIME The
domestic cost of Americas drug control policy in
foreign countries

• By
• Horace Bartilow
• Kihong Eom
• The University of KentuckyDepartment of
  Political Science

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Abstract

• The existing literature on Americas drug
  control policy towards drug producing countries
  in Latin America contend that US policy has
  helped to create a political environment that has
  facilitated a significant rise in narco related
  violent crime, acts of terror against the state,
  and has destabilized the region in ways that
  foster the growth of the drug trade. But what
  effect does Americas drug control policy
  specifically, drug interdiction and the
  immobilization of drug traffickers have on narco
  related violent crime in Central American and
  Caribbean countries who serve as strategic drug
  transit zones in the global drug industry? We
  answer this question by empirically analyzing
  drug crime data for Caribbean and Central
  American countries from 1984 to 2000 using two
  different estimation procedures. The first is a
  time series cross-section model and the second is
  a simultaneous equation model. After controlling
  for variables that affect overall crime the
  results show that increasing levels of drug
  interdiction and the immobilization of drug
  traffickers contributes to increasing levels of
  drug related crime in the Caribbean basin. These
  results suggest that US drug control policy may
  have the unintended effect of destabilizing the
  socio-political systems of Central American and
  Caribbean countries important allies in
  Americas drug war and could ultimately
  discourage governments in the region from future
  cooperation with core aspects of US drug control
  policy.

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The Relationship between Drug Trafficking and
Violent Crime

• In the major drug consuming countries in the
  world such as North America and Western Europe,
  it is now conventional practice to refer to a
  tripartite classification scheme of
  psychopharmacological effects, economic
  compulsive drives, and systematic violence to
  identify the relationship of drugs to violent
  crimes against people and property (Goldstein
  1985 Tullis 1995).

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The Relationship between Drug trafficking and
Violent Crime (contd)

• The psychopharmacological dimension relates to
  people becoming irrational, agitated, impulsive,
  uncontrollably anger and physically abusive even
  to the point of committing murder. The economic
  compulsive dimension is associated with violent
  criminal acts to obtain money for personal drug
  consumption (e.g. through burglaries and
  robberies).

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The Relationship between Drug trafficking and
Violent Crime (contd)

• The systematic dimension relates to drug
  cartels, gangs, narco-insurgents and traffickers
  protecting their product or turf from
  law-enforcement officials, or from each other by
  resorting to extreme forms of violent behavior.
  The psychopharmacological and economic compulsive
  dimensions relates to violent crimes by drug
  abusers while the systematic dimension relates to
  violent crimes by cartels and traffickers.

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American Drug Control Policy

• Since violence is an integral part of the drug
  industrys operation, American policy makers
  contend that US drug control policies
  specifically, the interdiction of illicit drugs
  and the immobilization or arrest of drug
  traffickers is an effective means of reducing
  drug related violence in the global war on drugs
  (Reuter and Kleinman 1986).

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American Drug Control Policy (contd)

• American drug control policy is informed by
  the logic that the reduction of the supply of
  drugs will increase market prices in the US and
  as a result US consumers will therefore forgo
  drug consumption and drug abuse thereby reduce
  the likelihood of violent crime. By this logic,
  efforts to reduce domestic drug consumption in
  the US have led American policy makers to seek
  cooperation and collaboration with foreign
  countries in the areas of interdiction and
  trafficker immobilization (Toro, 1992).

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American Drug Control Policy (contd)

• To ensure foreign country cooperation in the
  war on drugs, the Reagan administration
  increased diplomatic pressure on drug producing
  and drug transit countries and strengthened the
  capacity of the US to impose the
  extraterritoriality of its criminal laws
  throughout the Western hemisphere. As a result,
  the administration introduced the Anti-Drug Abuse
  Act of 1986 and the priority of narcotics issues
  was, for the first time, placed on the
  international agenda. The US government developed
  a certification practice to evaluate the
  performance of foreign country cooperation in the
  drug war.

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American Drug Control Policy (contd)

• The Anti-Drug Abuse Act made US financial
  assistance, positive votes within multilateral
  lending institutions and trade preferences
  conditional on foreign governments cooperation
  against drug trafficking (Perl, 1989 United
  States Senate, 1988b).

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Existing Research and US Drug Control Policy

• Students of US drug control policy towards
  drug producing countries in Latin America have
  consistently noted that US policies have
  increased the level of drug related violent crime
  in the region. These scholars argue that by
  implementing US drug policies in the region,
  American policy makers have frequently introduced
  US military forces into countries like Bolivia,
  Columbia and Peru to battle traffickers at the
  source of their operations.

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Existing Research and US Drug Control Policy
(contd)

• For example Operation Blast Furnace - the
  intervention of U.S forces to destroy cocaine
  laboratories in Bolivia and the introduction of
  US military personnel to battle Narco-insurgents
  in Columbia and Peru. Consequently, American
  policy has militarized the region and facilitated
  an escalation of the drug related violence
  primarily kidnappings, assassinations and the
  spread of narco-insurgent violent confrontations
  against governments in the region (Bagley 1992
  Crandall 2002 Labrousse and Laniel 2001 Lupsha
  1996 Tokatlian 1994).

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The Limits of Existing Research

• The problem with this line of argument is that
  the causal inference - namely, that US drug
  control policy has facilitated the escalation of
  drug violence in Latin America - is not
  convincing. The counterfactual is that even in
  the absence of US drug control policies, drug
  related violence would most likely increase due
  to the fact that illicit drugs are largely
  produced in Latin American countries and
  traffickers would naturally utilize violence
  against each other and against governments in the
  region in order to expand and protect their
  enterprise.

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The Limits of Existing Research (contd)

• Essentially, existing studies are unable to
  separate the level of drug violence that is
  endemic to countries that produce drugs from the
  reported enabling affects of US policies towards
  the region. A more systematic approach would be
  to estimate the impact of US drug control
  policies on drug violence in Central American and
  Caribbean countries who serve as transit zones
  and not drug producers, and where drug cartels
  like Cali and Medaine or narco-insurgents groups
  like FRAPH in Columbia and the Shining Path in
  Peru are not indigenous to the political
  landscape of these countries. In this way much of
  the drug related violence that is endogenous in
  existing country specific studies can be avoided.

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The Central Argument

• 1. The only way in which US drug control policies
  - specifically drug interdiction could
  effectively reduce crime is if we make the
  assumption that the demand for drugs is elastic.
  However, given the psychopharmacological
  addictive nature of drug abuse, we argue that the
  demand for drugs is inelastic. And therefore drug
  interdiction under conditions of demand
  inelasticity will increase drug related violence
  by drug users (the economic compulsive dimension)
  and by drug traffickers (the systematic
  dimension).

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The Central Argument (contd)

• 2.The Immobilization of drug traffickers will
  most likely increase drug related violence due to
  the fact that traffickers will be replaced at a
  higher rate than the level of arrests. In fact
  the immobilization of drug traffickers may be
  counterproductive to the goal of reducing crime.
  Given the strong financial rewards of the drug
  industry, the removal of one trafficker merely
  opens up opportunities for another to enter. And
  new recruited traffickers are likely to commit
  more violence as a way of consolidating their
  position as they move deeper into the industry
  (Spellman, 1994 Spellman, 2000).

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The Central Dependent Variable

• The Drug Crime variable measures the volume of
  drug related crime (homicides and robberies) per
  1000 persons for the Caribbean and Central
  American countries in our data set. The data is
  collected from various issues of the
  International Crime Statistics published by
  INTERPOL.

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Central Explanatory Variables

• 1. Drug interdiction is measured in terms of the
  interdiction of cocaine and marijuana and is
  calculated by dividing a countrys yearly
  seizures of cocaine and marijuana in kilograms by
  the yearly number of a countrys active law
  enforcement personnel. The drug interdiction data
  was collected from various issues of the
  International Narcotics Control Strategy Report
  and from the Organization of American States
  (OAS) the Inter-American Drug Abuse Control
  Commission (CICAD). The law enforcement
  personnel data was adopted from various issues of
  The Military Balance (Institute for Strategic
  Studies, 1984 - 2000).

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Central Explanatory Variables (contd)

• 2. Trafficker immobilization measures the yearly
  number of drug arrest of people convicted of drug
  trafficking. This data was also collected from
  various issues of the International Narcotics
  Control Strategy Report and from the Organization
  of American States (OAS) the Inter-American Drug
  Abuse Control Commission (CICAD).

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Confounding Variable Number of Drug Users

• We control for a host of variables that
  theoretically predict general crime and drug
  crime in particular. These include the number of
  drug users in the Caribbean basin. Since the
  psychopharmacological and economic compulsive
  dimensions of drug related crimes relates to
  violent crimes committed by drug abusers its is
  expected that increasing numbers of drug users is
  expected to increase drug related crime
  (Goldstein 1985 Tullis 1995). This data was also
  collected from various issues of the
  International Narcotics Control Strategy Report.

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Confounding Variable Distance from the US

• Drug trafficking is as much about the
  covering distance as it is about acquiring
  wealth. Since the Caribbean basin serves as a
  major transit point for drug traffickers, it is
  expected that countries that are geographically
  closer to the US will be more exposed to drug
  trafficking than those that are further away and
  will therefore have higher incidence of drug
  related violent crime. Our distance variable was
  collected from Direct-Line Distances, U.S Edition
  (Gary L. Fitzpatrick and Marilyn J. Modlin, 1986)
  

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Confounding VariablesUnemployment

• The rate of unemployment is traditionally used
  as a control variable in many criminological
  studies of crime. It is argued that high levels
  of unemployment increase the level of crime in
  general and drug related violent crime in
  particular,since the unemployed will be drawn to
  the lucrative drug industry (Ehrlich, 1973
  Chaiken and Chaiken, 1982 Spelman, 2000). This
  variable was collected from the World Banks
  World Development Indicators 2001.

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Confounding VariablesEconomic Growth

• Economic growth is also a conventional control
  variable used in many criminological studies of
  crime. High levels of economic growth is expected
  to reduce general crime and drug related crime in
  particular. (Bruce D. Johnson, Andrew Gloub and
  Eloise Dunlap, 2000). This variable was collected
  from the World Banks World Development
  Indicators 2001.

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Confounding VariablesTotal External Debt

• High levels of external debt encourage people
  in developing countries to export illicit drugs
  to rich drug consumers in the developed countries
  (George,1992). Since indebtedness decrease
  personal disposable income drug consumption and
  drug related violent crime will decrease as well.
  Therefore it is expected that the level of a
  countries total indebtedness will have a negative
  impact on drug violence. This variable was
  collected from the World Banks World Development
  Indicators 2001.

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Confounding VariablesUS Drug Consumption/per
street Value

• It is important to control for the effects of
  US drug consumption on drug crime in the
  Caribbean basin. Since Central American and
  Caribbean countries serve as drug transit zones
  for markets in North America, increases in US
  drug consumption drives up profits for
  trafficking gangs and increase the likelihood for
  systematic violent crime between them. This
  variable is calculated by dividing the yearly
  consumption of drugs in the US by the average
  street price. This data was collected from the
  2000 issue of the Office of National Drug Control
  Policy.

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Estimation Model 1 Assumes an Exogenous
Relationship between Drug Control Policy and Drug
Crime

• We analyze drug crime data for Caribbean and
  Central American countries from 1984 to 2000 via
  the following time series cross-section equation
• Drug Crimeit ?0 ?1Drug Seizureit ?2Drug
  Arrestit ?3Drug Usersit ?4Distanceit
  ?5Unemploymentit ?6Economic growthit
  ?7External Debtit ?8Illicit Drug consumption
  per priceit ?it
• The Estimation method is OLS with panel
  corrected standard errors assuming V(?it) ?2i
  and COV(?it, ?jt) ? 0 where i ?j.

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Model 2 Assumes an Endogenous Relationship
between Drug Control Policy and Drug Crime

• Our argument is that drug interdiction
  increases drug crime. However, it is plausible
  that increases in drug crime would force
  governments to interdict drugs. And since
  replacement theory predicts that the
  immobilization or arrest of traffickers increase
  drug crime, its is also possible that increases
  in drug crime would lead to the arrest of drug
  traffickers. In other words, drug interdiction
  (cocaine and marijuana seizures) and the
  immobilization of drug traffickers are
  endogenously related to drug crime. Instrumental
  variables are generated to predict drug
  interdiction (cocaine and marijuana seizures) and
  drug arrest. These instruments are placed into
  the statistical model that predict Drug Crime
  via the following Three Stage Least Least Square
  Structural Equation

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Model 2 Three Stage Least Square Structural
Equation Model of Drug Crime

• 1) Drug Crime1it ?10 ?11Marijuana
  Seizureit ?12Cocaine Seizureit ?13Drug
  Arrestit ?14Drug Usersit ?15Distanceit
  ?16Unemploymentit ?17Economic growthit
  ?18External Debtit ?19 US Drug consumption per
  priceit ?1it
• 2) Drug Arrest2it ?20 ?21Drug Arrestit-1
  ?22Drug Crimeit ?23Marijuana Seizureit
  ?24Cocaine Seizureit ?25Distanceit ?26Drug
  Usersit ?27Unemploymentit ?28Economic
  growthit ?29External Debtit ?210 US Drug
  consumption per priceit ?211 US Marijuana
  Consumptionit ?212Money Launderingit ?2it

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Model 2 Structural Equation Model of Drug Crime
(Contd)
3) Marijuana Seizure3it ?30 ?31Marijuana
Seizureit-1 ?32Drug Crimeit ?33Drug Arrestit
?34Neighboring States Effortit ?35US
Bilateral Drug Interdiction it ?36Total Coast
Line (Km) of CB Countries it ?37CB Countries
Distance from the US it ?38South American Drug
Seizures it ?39Per-capita purchasing power
parity in CB Countries it ?310US per-capita
purchasing power parity it ?311Government
Corruption in CB Countries it ?312Domestic
Illicit Drug Consumption in CB Countries it
?313Domestic Illicit Drug Consumption in the US
it ?314Economic Trade Openness of CB Countries
it ?315Individual Political Freedom and Civil
Liberties in CB Countries it ?316Institutional
Political Openness in CB Countries it ?317US
Aid to CB Countriesit ?3it
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Model 2 Structural Equation Model of Drug Crime
(Contd)
4) Cocaine Seizure4it ?40
?41Cocaine Seizureit-1 ?42Drug Crimeit
?43Drug Arrestit ?44Neighboring States
Effortit ?45US Bilateral Drug Interdiction it
?46Total Coast Line (Km) of CB Countries it
?47CB Countries Distance from the US it
?48South American Drug Seizures it
?49Per-capita purchasing power parity in CB
Countries it ?410US per-capita purchasing power
parity it ?411Government Corruption in CB
Countries it ?412Domestic Illicit Drug
Consumption in CB Countries it ?413Domestic
Illicit Drug Consumption in the US it
?414Economic Trade Openness of CB Countries it
?415Individual Political Freedom and Civil
Liberties in CB Countries it ?416Institutional
Political Openness in CB Countries it ?417US
Aid to CB Countriesit ?4it
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Model 2 Structural Equation Model of Drug Crime
(Contd)
Where superscript indicates equation number,
subscript i refer to a country and subscript t
refers to a year. The estimation method is three
stage least squares assuming COV (?jit, ?kit) ? 0
where j ? k.
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RESULTS