Criminal economy is defined as an economy in which national economic development is associated with a series of economic, social, cultural, political, and legal factors both on a national and on an international level and by the interaction among these factors. It began its existence under the colonial regimes, thrived in the presence of organizations of a authoritarian or fascist nature, and finally acquired an international dimension. The historical background behind the illicit traffic in coca, opium, cocaine, and marihuana is presented, and the differences between the Sicilian Mafia and the Latin American system are discussed. The war against drugs developed in a slow and insufficient way from the 1960s and the 1970s, and, according to the statistics of the World Health Organization, there are as many as 4,800,000 drug addicts in the world with the United States being the major drug market. The economic value of this trade is equivalent to 110 thousand million dollars a year; this economic power exercises an enormous influence on the national economies of the producing countries and greatly affects social, cultural, ideological, and political factors of development. The economic effect can be positive in terms of economic growth and employment opportunities, but it is mostly negative in that it does not affect, in a positive manner, the country's productive infrastructures such as inflation, criminal violence, and social well-being. Resentment is expressed for those nations who, as major markets for the drugs, seek to impose drug reduction policies without replacing them with more legitimate means of economic growth. The solution is suggested that investments be made in the drug-producing countries that would lead to legitimate, non-drug related employment for current drug economy workers. 48 footnotes