Police and Illicit Drug Markets: Some Economic Considerations*

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Abstract
The role and effects of police activity in the enforcement of drug laws are examined using the economic tools of supply and demand analysis. In view of the epidemic nature of the drug abuse problem and its obvious economic aspects, the infrequent application of economic analysis in the area seems an anomaly. This analysis suggests that some of our current enforcement practices are apparently futile. It is clear, however, that no simple solution to illicit drug abuse exists because of the interdependence of the markets for different drugs, because of the interplay between the supply and demand sides of most clandestine drug markets, and because of changing social mores and legal standards. Several important implications for the activities of police are evident. Vigorous drug law enforcement by police appears to be counterproductive and dysfunctional when it is: (1) directed at drugs such as heroin which are addictive in nature and which have price inelastic (unresponsive) demands; and (2) directed primarily at the supply side of the market. Supply‐reducing law enforcement activities will apparently not be counterproductive and will not greatly increase the number and character of crimes if it is directed at drugs which are nonaddictive in nature (for example, marihuana), and which have price elastic (responsive) demands.Demand‐reducing policies are more appropriate for addicting drugs such as heroin. Demand‐reducing polices analysed include; (1) education; (2) rehabilitative incarceration; and (3) drug substitutes such as methadone. The role of police in demand‐reducing policies is probably smaller, however, than their corresponding role in supply‐reducing policies. The role of police in a medically‐oriented approach similar to that existing in Geat Britain is also minimal.

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