Cover Image
close this bookIllicit Drugs: Social Impacts and Policy Responses (UNRISD, 1994, 19 p.)
View the document(introduction...)
View the documentPRODUCTION
View the documentTRAFFICKING
View the documentCONSUMPTION


Illicit drugs typically move internationally from less developed areas of the world to more developed countries, where most drug consumption takes place. In recent years, just as the growth of legitimate global businesses has been facilitated by the globalization of financial systems and market relations, drug producers and traffickers have also taken advantage of the opportunities presented by the changing macro-economic environment. They have organized themselves on a global scale and put a significant proportion of their drug profits in financial centres offering secrecy and attractive investment returns. Their adoption of high-tech computer and communications technology has facilitated the expansion of their trade and the protection of industrial secrets. Drug traffickers are now able to launder illicit profits by moving money around the world electronically with few national controls. They are aided by porous borders due, in some cases, to policies intended to encourage trade and investment, and in other cases to weak governments and weak or unenforceable laws against money laundering, fraud or organized crime.

The consumption, production and trade of illicit drugs have a wide variety of adverse socio-economic and political effects. These activities can at times undermine the legal economy (for instance by contributing to an overvalued exchange rate). They contribute to increased crime and social disruption on all levels, and their adverse effects can in fact be intensified by drug control laws. Most of the benefits and liabilities associated with the production and trade of drugs ultimately derive from illegality itself, a condition which the drug control laws, by definition, establish. Illegality provides what has been called the “crime tax”: the difference between prices in legal and illegal markets. This “tax” is reaped principally by traffickers, but they pass on a sufficient proportion to peasant growers to create incentives for drug crop production. Given the lack of alternative economic opportunities, especially in rural areas of producing countries, illegality and the profits associated with it make it very difficult to devise a policy mix of punishments and incentives that would induce growers to abandon their drug crops. In many cases, moreover, drug control initiatives have actually contributed indirectly to social dislocation, corruption, militarization and abuse of human rights.

The following sections examine in more detail the economic, social and political impacts of illicit drugs at the production, trafficking and consumption stages, as well as the forces contributing to the problem. Effective policy strategies should be based on an understanding of the linkages between these different stages in the illicit drug chain.


Considerable legitimate production of drugs occurs for medical and scientific purposes. India is a large producer of licitopium, and Bolivia and Peru produce between them about 20,000 tons of legal coca leaves each year for traditional or medical uses. Production estimates for legal drug crops are much more accurate than for illegal ones: even under the best of circumstances, illicit drug production figures are only rough estimates because of the clandestine nature of much of the drug trade. Nevertheless, the main producing and trafficking countries are known to be Afghanistan, Bolivia, Colombia, Iran, Pakistan, Peru and Thailand.

Drug production and trade create both benefits and liabilities for the principal producing countries. Illicit drugs can be very important to the national economy: in Bolivia, for instance, the coca-cocaine economy has generated more revenue than any other single export in recent years. Supplying drugs to an international market has benefited hundreds of thousands of previously marginalized people. Poor farmers in many drug producing countries have earned more money, experienced more social mobility and exercised more power over their destiny and that of their children than perhaps at any time in this century. Moreover, although a large proportion of drug profits leaves rural areas, drug crop production does create economic multipliers in drug growing areas, where new money is spent on a better mix of necessities (food, shelter, clothing) and luxury goods (radios, televisions, trucks). As locally produced goods are purchased, cottage and service industries develop and regional economies generally become more active. If all these benefits originated from legitimate activities, the world would herald them as a positive sign of progress and improvement in the less developed countries.

However, involvement in underground and corrupt activities also brings problems: in many countries, violence escalates, in some cases farmers fall victim to the traffickers, and end up growing drug crops for low economic returns. Traditional social values tend to be eroded as illegality permeates a society, and people become less inclined to accept the norms on which consensus politics rest.

In addition, severe environmental damage can be caused by drug production. Drug crops themselves are not necessarily detrimental to the environment (indeed, coca protects against soil erosion in some steep hillsides in Bolivia) unless they are grown on fragile or inappropriate land, as is sometimes done to avoid detection. More serious problems result from the chemicals used in the initial stages of drug processing being dumped into rural streams and rivers.

Why Do People Continue To Grow Illicit Drug Crops?

Poverty and the absence of attractive alternative economic opportunities are the main factors contributing to growers’ continued involvement in drug production. The principal drug growing regions are among the most impoverished and economically stagnant in the world, and in many of them levels of living are declining, in part as a result of structural adjustment programmes. In many of these rural areas, illegal drug growers can make from 10 to 50 times more in provisioning the illegal drug market than they can in any other agricultural pursuit. Thus it is not surprising that growers cultivate coca, opium and cannabis. Although producing drug crops involves risk, the high returns they yield make these crops preferable to other less risky agricultural activities for many people.


Two or three decades ago, much illegal drug distribution was akin to a cottage industry - small-time traffickers, including tourists, picked up a few hundred grams of heroin or cocaine or a kilogram of marijuana from a producer and distributed the product directly to casual but trusted contacts and personal friends. They in turn passed along small amounts, some of it for financial gain. Although a proportion of the trade in drugs is still carried out in this way, trafficking is increasingly organized, particularly at the wholesale and intermediary levels and for cocaine or heroin (less so for marijuana). A few large, vertically integrated, multinational illicit drug distribution organizations existed as early as the 1930s; such trafficking is now increasingly facilitated by sophisticated organization and distribution techniques able to counter the technology currently available to law enforcement agencies. Evidence of substantial organized production and marketing networks exists not only for the principal consuming countries, but also for many of the processing and transit regions.

The illegal drug economy may at times act as a safety-valve to compensate for the shortcomings of the formal economy. In Bolivia in the mid-1980s, for instance, the dollars brought in by drug traffickers were welcomed by the central bank in order to ease the foreign exchange shortage in the country. However, the adverse effects of drug trafficking can undermine any economic benefits in producing and transit countries: traffickers infiltrate bureaucracies, buy public decisions, and conduct business through violence and intimidation. They create an anti-state outside any rule of law or central government control, necessitating the expenditure of millions of dollars for law enforcement activities. In the social sphere, traffickers corrupt a significant proportion of the population by attracting new generations to the drug trade, glamorizing gangs and glorifying the role model of the conspicuously consuming new rich. They thereby contribute to social disorganization and disintegration.

There is a straightforward connection between drug trafficking and crime. Traffickers’ activities are linked to what is termed “systemic violence”, by which the drug syndicates, gangs and smugglers who secure, launder and guard money attempt to obtain and preserve positions of power by whatever means necessary. Traffickers, not consumers, commit most drug-related homicides. They are able to use the billions of dollars at their command to attempt to corrupt, subvert or eliminate institutions and people who stand in their way.

What Has Helped Traffickers To Succeed?

Traffickers have been aided by three phenomena. First, raw materials are easy to obtain because, as noted above, rural poverty and the failure of rural development have attracted many poor farmers to drug crops. Second, the low salaries paid to the local, national and international officials involved in fighting drugs, at least compared to the amount of money traffickers are able to offer as bribes, have increased the ability of traffickers to corrupt such officials. Third, drug processing is facilitated by lack of effective controls over the necessary chemicals - both on the part of local governments, and on the part of the North American and European countries where the chemicals originate. In addition, weak communication and transportation infrastructure allows drug production and processing to be sited in very remote areas relatively outside the control of the state.

Where political institutions are relatively strong, traffickers appear to be a troubling but not strongly disrupting influence on national life - although they may cause considerable local disruption, as in inner cities in the United States. In institutionally weak countries, however, drug traffickers engage in a struggle for the nation’s institutional life, for territory and for control over the lives of many citizens. This can be seen, for example, in Afghanistan, Colombia, Myanmar and Peru.

When international markets are tightened, traffickers work to improve the quality of their products, and modern technology has aided them in this process. They are mainly interested in reducing the detectability and weight-to-price ratio of their products in order to ease smuggling. Such processing concentrates alkaloids and frequently heightens the addiction rate among local populations (as in Pakistan, for instance).

Traffickers are highly mobile and unrestricted by national boundaries. They shift their laboratories and trade routes virtually at will, preferring to go where national governments are least in control. Thus in the Golden Triangle (Laos, Myanmar, Thailand), for example, traffickers’ border operations concentrate at points of least resistance and change from year to year. When the Colombian government cracks down on its drug operators, they take up temporary residence in Bolivia, Miami, Panama or Peru and direct their operations from there.


Collecting reliable data on the consumption of illicit drugs is difficult, as governments and individuals are reluctant to give out such information. While consumption is rapidly spreading all over the world, the highest per capita use is reported to be in Canada and the United States. In the latter alone, consumer spending on narcotics is thought to exceed the combined gross domestic products of more than 80 developing countries. Eastern Europe has also experienced increases in illicit drug demand due to the socio-economic crisis, high unemployment and easing of border controls.

It is clear that regular or high levels of consumption of most illicit drugs have a range of adverse effects on the individual. Illicit drugs affect an individual’s health, financial position, productivity and social relations. Drug use can cause birth defects, poor parent-child relations and neuro-biological collapse from overdose with attendant hospital costs. It can also adversely affect the classroom performance and psychological development of adolescents.

A consideration of the broader socio-economic and political effects of consumption revolves around an understanding of when self harm constitutes social harm. Most of the problems drugs create for individuals also imply social and economic overhead costs, particularly those associated with medical care, welfare and other social services. In terms of society’s interests, acute or chronic consumption is clearly more harmful than occasional consumption, and use of drugs by many people is more harmful than use by a few. The consumption of a moderate amount of alcohol or cannabis may produce little social harm, whereas excessive consumption may lead to disasters for others as well as for the user. With “harder” drugs - heroin, cocaine and crack cocaine the public implications are potentially more severe. Crack cocaine addiction has become a particularly serious public policy concern in the United States, where cocaine-related emergency ward admissions have increased, with the public often bearing the financial burden.

The economic costs of drug consumption can be categorized as direct and indirect. Direct costs include increased state expenditure on police, courts, military, treatment programmes and welfare payments, as well as business expenditures on security measures. Indirect economic costs include the displacement of legal industries, decreased control over the economy, and fiscal problems related to an inability to tax the drug economy.

The relationship between the injection of drugs and HIV transmission has become a major concern in many parts of the world, both in the industrialized countries and in many poor countries lying either in drug producing areas or along drug trans-shipment routes. Major outbreaks of HIV infection have occurred in areas such as Manipur in north-east India, Myanmar, Ruili in southern China and Thailand. Women and children who are not themselves drug users may also be affected by problems related to drug abusing men, including HIV infection.

Drug Consumption and Crime

There is obviously a relationship between drug consumption and crime, although it is often not clear which is cause and which is effect. In principal consuming areas such as North America and Western Europe, psycho-pharmacological effects, economic-compulsive drives and systemic violence are considered the principal components of the drugs-crime link.

The most harmful psycho-pharmacological effects of drug use, particularly those associated with crack cocaine, involve people becoming irrational, excited, agitated or impulsive. Users may become unable to control their anger and vent it in the form of physical assault, including homicide. In one of the first studies clearly linking violent behaviour and crack cocaine use, it was reported that nearly half the callers to a nationwide cocaine hotline in the United States said they had committed violent crimes or aggressive acts (including child abuse, murder, robbery, rape and physical assault) while using crack.

The economic-compulsive dimension of drug-related crime is associated with criminal acts to obtain funding for personal drug consumption (through burglaries, for instance). The systemic dimension refers to the activities of drug syndicates, associations, gangs and smugglers involved in protecting their product from law enforcement officials or from each other by whatever means necessary. A fourth dimension could be added to this standard analysis - the “corruption-criminality” connection, which occurs when administrative and political personnel such as drug enforcement agents and border patrol officers themselves become allied with the drug trade.

Why Is Global Consumption Increasing?

Whether drug abuse is a cause or an effect of social problems is central to the question of why global consumption of illicit drugs is increasing. How far drug abuse contributes to or is a symptom of high unemployment, breakdown in family structure and poor living conditions is a constant source of debate. High rates of unemployment tend to occur in the age range of those most likely to use drugs, while young people who have been associated with drugs find it even more difficult to obtain productive employment.

While families can have a powerful influence on shaping the attitudes, values and behaviour of children, it is commonly believed that peers can have an even stronger influence on drug use during the formative years of youth. As families come under pressure either through parental failures, rapidly changing cultures or economically imposed hardships, children look for alternative forms of association, such as youth gangs. Some youth gangs have become “family” for street children in Bangkok, Lima, Los Angeles, New York, SPaulo and other cities. To survive, these children frequently turn to drugs, violence and theft, all of which may be attached to ritualized ceremonies of belonging and obligation. Once part of a drug subculture, they become more marginalized from mainstream society, adopting new values that reinforce drug taking practices.

Supplies of illicit drugs in many areas have become cheaper and more plentiful despite attempts to suppress crop production. Grower and trafficker counter-strategies have been more than sufficient to maintain ample supplies on the market. At the same time, more addictive forms of drugs, such as crack cocaine, have been developed. The ready availability of such drugs makes consumption all the more difficult to suppress.