Drug decriminalization and the price of illicit drugs

_One moderate alternative to the war on drugs is to follow Portugal’s lead and decriminalize all drug use while maintaining the illegality of drug trafficking. – _Gary S. Becker and Kevin M. Murphy (2013)

In the late 1980s and 1990s a growing population of intravenous heroin users became a major threat to public health in Portugal, where rates of heroin users were among the highest in Europe. In the mid’90s Portugal engaged in an intensive debate on alternative enforcement policies to deal with drug use and, in 1998, a panel of leading scholars and medical professionals presented a report with recommendations rooted in understanding drug dependency as a disease rather than a crime. This process culminated with the approval of the law decriminalizing the personal use and possession of illicit drugs in 2001. In the Portuguese decriminalization framework, police can no longer arrest drug users but must refer them to the local Commissions for the Dissuasion of Drug Use that decide the administrative or public order sanction to apply. Severe criminal penalties are still applied to drug traffickers.

The fear of increased usage due to softer law enforcement has been a critical argument in the discussion on the alternative legislative approaches to deal with the illicit drug economy. However, the results suggest that prices of cocaine and opiates did not decrease following the drug decriminalization policy, which is in contradiction with the commonly held belief that softer drug law enforcement necessarily leads to lower prices and, consequently, to higher usage rates. The results are in line with the failure of the U.S. “war on drugs” to link higher prices with increased toughness. In Portugal, decreased toughness on the demand side if anything contributed to higher prices than the ones that would have been observed in the absence of the policy change.

Click here to go to the paper by Sónia Félix and Pedro Portugal.