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NCJ Number: 155859 Find in a Library
Title: Trade Policy and the Legalization of Drugs
Journal: Southern Economic Journal  Volume:58  Dated:(1992)  Pages:655-670
Author(s): M Richardson
Date Published: 1992
Page Count: 16
Type: Legislation/Policy Analysis
Format: Article
Language: English
Country: United States of America
Annotation: A prominent suggestion in recent debate on the U.S. drug problem has been to legalize the use of drugs, including cocaine; the debate about drug legalization, however, is very polarized.
Abstract: There seems to be no middle ground in the debate between total prohibition and unregulated legalization. An economist's solution would involve a compromise that balances costs and benefits of drug legalization and taxation at the margin, thus making the issue of drug legalization an empirical matter. A preliminary analysis of economic issues involved in drug legalization is presented that focuses on whether drug legalization can be accompanied by trade restrictions that improve welfare but do not increase drug use. The author concludes that, under reasonable assumptions about drug interdiction, drug smuggling will still persist even if drugs are legalized. In other words, trade restrictions cannot totally abolish drug smuggling. The author develops a two-tier model of drug sales in which pure profits accrue at both levels. The model also determines an equilibrium level of endogenous violence among competing drug dealers as rent-seeking behavior and identifies market responses to various policy changes. Additional information on the drug sales model is appended. 15 references, 13 footnotes, and 1 figure
Main Term(s): Drug legalization
Index Term(s): Cocaine; Drug Policy; Drug regulation; Drug smuggling; Economic analysis of crime; Economic crime models; Policy analysis
Note: DCC
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