Between 2000 and 2008, American taxpayers have doled out $4.3 billion on the Colombian drug war, according to a new study conducted by economists at MIT and Colombia’s Universidad de los Andes. The study, entitled “The Economics of the War on Illegal Drug Production and Trafficking” by Daniel Mejia and Pascual Restrepo, ultimately found that the billions spent on the “War on Drugs” in Colombia has been a huge waste of money.
The US’s decade-long initiative to combat the Colombian drug trade and organized crime in the nation is known as Plan
Colombia. Under Plan Colombia, the US has funded two maneuvers, the “eradication of coca plants via the aerial spraying of herbicides, and interdiction efforts to block cocaine transit routes and seize shipments of cocaine,” according to the Washington Post‘s Christopher Ingraham. The study found that, between 2000 and 2008, it cost the US $940,000 to destroy ONE kilo of cocaine with herbicide spraying. Interdiction (actually seizing shipments) proved far less costly (bust still costly) at $175,000 per kilo.
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.
Much of that additional cost gets added on through the refinement and trafficking process, as various middlemen take their cut. If you’re trying to stop cocaine from entering the U.S., seizing a parcel of it at a border somewhere will take a much bigger bite out of the overall flow than spraying a farmer’s field.
The tactics used in Plan Colombia have pretty much done nothing when it comes to keeping cocaine out of people’s noses. During the give time period, the price per gram of coke in the US actually from $205.67 to $182.75. The study found that the most cost-effective/efficient means of fighting the drug trade is reducing drug consumption through actually helping people kick their cocaine habits. Destroying a kilo of coke through drug treatment would cost between $12,500 and $68,705 annually. The economists concluded their study with the words, “If the U.S. wants to reduce drug consumption, it is better off investing in treatment and prevention programs domestically than subsidizing source country interventions, [such] as Plan Colombia, abroad.”
Read “The Economics of the War on Illegal Drug Production and Trafficking” by Daniel Mejia and Pascual Restrepo here.