 | NORML News: Cost-Benefit Analysis of Drug Laws |
 Considering the huge cost of enforcement and the obvious social cost of prosecuting and imprisoning offenders, it is hard to fathom why a cost-benefit analysis of the prohibition has never been done, writes Brandon Hutchison.
The Blake-Palmer report in the early 1970s suggested that prohibition should only continue if shown to be effective, implying some kind of study was required. Under the Shipley government a small sum was budgeted for a study when the national drug policy was launched, but this item quickly disappeared off the agenda and no study was done apparently.
The NZ Law Commission has been working on a review of the Misuse of Drugs Act for 18 months and is due to release a draft report in August. The terms of reference of this review still appear to assume a prohibitionist framework but are flexible enough that a fundamental look at prohibition itself is possible. Perhaps lawyers will succeed where economists failed.
In the UK, the drug policy organization “Transform” has just published a 50 page analysis report comparing the cost-effectiveness of current prohibition with a possible regulatory model for drugs.
This paper appears motivated by the need to separate the harms due to policy from those due to drugs per se: “Current approaches ignore the basic finding that the policy of prohibition itself is the direct source of much of what is perceived as the ‘drug problem’ - specifically the vast majority of drug-related crime - rather than drug use per se”.
With regard to this common problem of conflating drug harms with those created by drug policy, Transform’s report criticizes David Nutt for doing just this in his famous 2007 Lancet paper listing drugs in order of their potential harm. The placement of heroin at the top of this scale is due to harms created by policy, not by any inherent harm of heroin suggest Transform. Perhaps if Nutt had listed heroin as having lower harm ranking than alcohol, as he did with cannabis, LSD, and ecstasy it would have been too much to accept in one paper.
The report also attacks the clear dishonesty of the government and others such as the UNODC in purporting to have evidence against drug policy reform that does not exist: “Serious policy decisions by the Government are being based on data that has never been collected... analysis that has demonstrably not been done...and with specific references to cost-benefit studies that do not exist.”
The Transform analysis was limited to heroin and cocaine, because these drugs are claimed by the government to cause the most harm. The scope was limited to England and Wales. Included in the analysis: crime, enforcement, mortality, health and care, youth costs, prescription costs, regulatory administration.
A list of the costs of prohibition was identified but many excluded from the analysis because although very real, they are hard to quantify. Exclusions include, costs to individuals from convictions (travel, employment, housing), costs of sex-work to fund drug habits, fostering of corruption, impacts on confidence in government and police, youth-police relations, human rights and of most importance the UK’s contribution to the global drug war which causes huge damage to political, economic, and social systems in some countries. These exclusions make the analysis very conservative indeed and potentially much more credible.
The Analysis:
Four regulatory scenarios were compared with current prohibition: A= an assumed 50% fall in drug use; B= no change in drug use; C= 50% increase in use; and D= 100% increase in use. These were compared to the costs under the current law:
Scenario / Costs
Current law: £16.79b
A: £3.15b
B: £5.95b
C: £8.75b
D: £11.55b
So unless drug use under regulation increased spectacularly, a possibility the report discusses in detail and discounts, a regulatory system would be more cost effective even with this limited conservative analysis.
The report argues that the impact of drug policy on levels of use and misuse has been dramatically overstated. It says ”Through a combination of evidence-led deployment of public health-based regulatory tools and increased choice, we can reasonably speculate that social norms about more responsible drug use could be fostered and that use would migrate overtime from more to less harmful drugs... it is possible and we would suggest likely that drug-related health risks/harms/costs per user, under a regulated model, would decrease...“
The report shows clear benefits from moving away from prohibition, but the benefits would be much more dramatic if the major harms caused by prohibition were added in. It raises the need for much more research on the effects of policy, especially on the areas that were excluded from the analysis.
TALKING POINTS: IS PROHIBITION WORKING?
New Zealand’s drugs trade is now a massive illegal business worth an estimated $1.5 billion a year.
Customs believe they catch only 20 per cent of what’s imported and police think they are finding less than 10 per cent of P labs.
Meth cases are almost 50 per cent of all cases heard in the High Court, even though for sentencing the courts regard major meth dealers on a par with murderers.
Last year former Justice Minister Annette King said none of the Government’s moves were having any effect on the price, purity or availability of the drug.
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Download the Transform Report
BERL's New Zealand Drug Harm Index
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