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Taxpayers wasted billions of dollars on a war on cocaine that didn’t work, economists say

Published: June 4, 2016
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Source: Washington Post

The U.S. government declared war on a plant. (Anthony Tong Lee/Flickr)

American taxpayers got a dismal return on their $4.3 billion investment in the Colombian drug war between 2000 and 2o08, according to a new analysis by economists at MIT and Colombia's Universidad de los Andes.

In the paper, which will be published in the June issue of the Journal of Economic Behavior and Organization, Daniel Mejia and Pascual Restrepo analyzed the cost to U.S. taxpayers of the two big U.S.-funded anti-cocaine efforts in Colombia: eradication of coca plants via the aerial spraying of herbicides, and interdiction efforts to block cocaine transit routes and seize shipments of cocaine. These efforts took place under the umbrella of Plan Colombia, a decade-long U.S.-backed initiative to fight the drug trade and organized crime in Colombia.

Mejia and Restrepo created a sophisticated economic model to account for the costs and benefits of these efforts. The model describes the international cocaine trade in its entirety, from production to transportation to sale. And it considers the tactics that coca growers and drug traffickers use to respond to enforcement efforts, like increasing production and shifting trade routes.

Mejia and Restrepo found that between 2000 and 2008, it cost the U.S. government $940,000 to eliminate a single kilogram of cocaine from the domestic market via herbicide spraying in Colombia. Eliminating that kilo via interdiction was considerably cheaper, at $175,000.

Why is interdiction so much more cost-effective than eradication? One reason is that cocaine's raw material — the coca plants targeted by eradication — make up a fairly tiny fraction of the final product's overall cost. For instance, the farm gate price of raw coca leaves is as little as $4.30 per kilogram in neighboring Peru. But by the time refined cocaine reaches the U.S. market, it sells for as much as $27,000 per kilogram or more.

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